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![CBDT FAQS DT. 25CBDT FAQS DT. 25CBDT FAQS DT. 25CBDT FAQS DT. 25THTHTHTH MARCH 2017MARCH 2017MARCH 2017MARCH 2017
For Derivative contracts :For Derivative contracts :For Derivative contracts :For Derivative contracts :
Forward contracts and similarForward contracts and similarForward contracts and similarForward contracts and similar ---- ICDS VIICDS VIICDS VIICDS VI
[Foreign Exchange] subject to para 3 of ICDS[Foreign Exchange] subject to para 3 of ICDS[Foreign Exchange] subject to para 3 of ICDS[Foreign Exchange] subject to para 3 of ICDS
VIII [securities]VIII [securities]VIII [securities]VIII [securities]
For others ICDS IFor others ICDS IFor others ICDS IFor others ICDS I
DisclosureDisclosureDisclosureDisclosure where to be madewhere to be madewhere to be madewhere to be made –––– Q 25Q 25Q 25Q 25
Net effect of ICDS to be disclosed inNet effect of ICDS to be disclosed inNet effect of ICDS to be disclosed inNet effect of ICDS to be disclosed in ITRITRITRITR
Form 3CDForm 3CDForm 3CDForm 3CD
No separate disclosures persons who areNo separate disclosures persons who areNo separate disclosures persons who areNo separate disclosures persons who are
not liable for taxnot liable for taxnot liable for taxnot liable for tax auditauditauditaudit
CA. Pramod Jain](https://image.slidesharecdn.com/icdspracticalimplications-southdelhi-170623085705/85/ICDS-Practical-Implications-21-320.jpg)
![ICDS IICDS IICDS IICDS I –––– ACCOUNTING POLICIESACCOUNTING POLICIESACCOUNTING POLICIESACCOUNTING POLICIES
No deduction of expected losses orNo deduction of expected losses orNo deduction of expected losses orNo deduction of expected losses or markedmarkedmarkedmarked to markedto markedto markedto marked
loss unless as per other ICDSloss unless as per other ICDSloss unless as per other ICDSloss unless as per other ICDS
Judicial Precedents:Judicial Precedents:Judicial Precedents:Judicial Precedents:
DCITDCITDCITDCIT (International Taxation) v. Bank of Bahrain & Kuwait(International Taxation) v. Bank of Bahrain & Kuwait(International Taxation) v. Bank of Bahrain & Kuwait(International Taxation) v. Bank of Bahrain & Kuwait
[2010] 41 SOT 290 (Mum) (SB)[2010] 41 SOT 290 (Mum) (SB)[2010] 41 SOT 290 (Mum) (SB)[2010] 41 SOT 290 (Mum) (SB) ---- LossLossLossLoss incurred onincurred onincurred onincurred on a/ca/ca/ca/c ofofofof
evaluation of contract on last date ofevaluation of contract on last date ofevaluation of contract on last date ofevaluation of contract on last date of B/S is allowableB/S is allowableB/S is allowableB/S is allowable.
AnticipatedAnticipatedAnticipatedAnticipated losseslosseslosseslosses allowed as deductionsallowed as deductionsallowed as deductionsallowed as deductions ‐‐‐‐ ABNABNABNABN AmroAmroAmroAmro
SecuritiesSecuritiesSecuritiesSecurities IndIndIndInd (P.) Ltd.(P.) Ltd.(P.) Ltd.(P.) Ltd. v.ITOv.ITOv.ITOv.ITO [[[[2011]152011]152011]152011]15 taxmann.comtaxmann.comtaxmann.comtaxmann.com 177(Mum)177(Mum)177(Mum)177(Mum)
MarkMarkMarkMark‐‐‐‐totototo‐‐‐‐market loss on derivatives held as stockmarket loss on derivatives held as stockmarket loss on derivatives held as stockmarket loss on derivatives held as stock‐‐‐‐inininin‐‐‐‐tradetradetradetrade
allowedallowedallowedallowed ‐‐‐‐ DCITDCITDCITDCIT v.v.v.v. KotakKotakKotakKotak Mahindra [2013]Mahindra [2013]Mahindra [2013]Mahindra [2013] 35 taxmann.com 22535 taxmann.com 22535 taxmann.com 22535 taxmann.com 225
(Mumbai(Mumbai(Mumbai(Mumbai ‐‐‐‐ Trib.)Trib.)Trib.)Trib.)
FAQFAQFAQFAQ ---- MarkedMarkedMarkedMarked to Market loss or expected loss as well asto Market loss or expected loss as well asto Market loss or expected loss as well asto Market loss or expected loss as well as
MarkedMarkedMarkedMarked to Market gain or expected gain not to beto Market gain or expected gain not to beto Market gain or expected gain not to beto Market gain or expected gain not to be
recognised unless as per ICDSrecognised unless as per ICDSrecognised unless as per ICDSrecognised unless as per ICDS
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![ICDS IIICDS IIICDS IIICDS II –––– PARTNERSHIP FIRMSPARTNERSHIP FIRMSPARTNERSHIP FIRMSPARTNERSHIP FIRMS
InInInIn case of dissolution of a partnership firm or AOP / BOI,case of dissolution of a partnership firm or AOP / BOI,case of dissolution of a partnership firm or AOP / BOI,case of dissolution of a partnership firm or AOP / BOI,
notwithstanding whether business is discontinued ornotwithstanding whether business is discontinued ornotwithstanding whether business is discontinued ornotwithstanding whether business is discontinued or
not, the inventory on the date of dissolution shall benot, the inventory on the date of dissolution shall benot, the inventory on the date of dissolution shall benot, the inventory on the date of dissolution shall be
valued at thevalued at thevalued at thevalued at the NRV.NRV.NRV.NRV.
Judicial Precedents:Judicial Precedents:Judicial Precedents:Judicial Precedents:
In cases of dissolution of firm, the stockIn cases of dissolution of firm, the stockIn cases of dissolution of firm, the stockIn cases of dissolution of firm, the stock‐‐‐‐inininin----trade will have to betrade will have to betrade will have to betrade will have to be
valued at the prevailing market price while preparing a/valued at the prevailing market price while preparing a/valued at the prevailing market price while preparing a/valued at the prevailing market price while preparing a/cscscscs ifififif
the business of firm is discontinuedthe business of firm is discontinuedthe business of firm is discontinuedthe business of firm is discontinued---- A.L.A. Firm v. CIT [1991] 55A.L.A. Firm v. CIT [1991] 55A.L.A. Firm v. CIT [1991] 55A.L.A. Firm v. CIT [1991] 55
Taxman 497(SC)Taxman 497(SC)Taxman 497(SC)Taxman 497(SC)
WhereWhereWhereWhere firm got dissolved due to death of a partnerfirm got dissolved due to death of a partnerfirm got dissolved due to death of a partnerfirm got dissolved due to death of a partner &business&business&business&business
was reconstituted withwas reconstituted withwas reconstituted withwas reconstituted with remaining partners &remaining partners &remaining partners &remaining partners & businessbusinessbusinessbusiness
continued without any interruption,continued without any interruption,continued without any interruption,continued without any interruption, closingclosingclosingclosing stock was to bestock was to bestock was to bestock was to be
valued atvalued atvalued atvalued at costcostcostcost orororor MP,MP,MP,MP, whichever was lower,whichever was lower,whichever was lower,whichever was lower, &&&& not at marketnot at marketnot at marketnot at market
valuevaluevaluevalue ----SakthiSakthiSakthiSakthi Trading Co. v. CIT [2001] 118 Taxman 301 (SC)Trading Co. v. CIT [2001] 118 Taxman 301 (SC)Trading Co. v. CIT [2001] 118 Taxman 301 (SC)Trading Co. v. CIT [2001] 118 Taxman 301 (SC)
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ICDS Practical Implications
The document discusses the practical implications of Income Computation and Disclosure Standards (ICDS) as shared by CA. Pramod Jain during a study circle event. It details the notifications from the Central Government regarding ICDS, their effective dates, and the necessary accounting changes required for compliance. Additionally, the document emphasizes the need for disclosures in tax audits and various scenarios involving inventory valuation and revenue recognition.
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ICDS Practical Implications
- 1. CA. PRAMOD JAIN FCA,FCS, FCMA, LL.B, MIMA, DISA CA. PRAMOD JAIN FCA, FCS, FCMA, LL.B, MIMA, DISA PRACTICAL IMPLICATIONS Shared at South Delhi CA Study Circle of NIRC of ICAI 22nd June 2017 Shared at South Delhi CA Study Circle of NIRC of ICAI 22nd June 2017
- 2. ICDSICDSICDSICDS BACKGROUNDBACKGROUNDBACKGROUNDBACKGROUND CG notified10 ICDS vide notification no. 32 of 2015CG notified 10 ICDS vide notification no. 32 of 2015CG notified 10 ICDS vide notification no. 32 of 2015CG notified 10 ICDS vide notification no. 32 of 2015 dated 31dated 31dated 31dated 31stststst March 2015 which were applicable fromMarch 2015 which were applicable fromMarch 2015 which were applicable fromMarch 2015 which were applicable from AY 2016AY 2016AY 2016AY 2016----17 onwards17 onwards17 onwards17 onwards Due to various issuesDue to various issuesDue to various issuesDue to various issues &&&& representations referred torepresentations referred torepresentations referred torepresentations referred to Expert committee & deferred by 1 year (6.07.2016).Expert committee & deferred by 1 year (6.07.2016).Expert committee & deferred by 1 year (6.07.2016).Expert committee & deferred by 1 year (6.07.2016). CBDT rescinded the old ICDS through notification no.CBDT rescinded the old ICDS through notification no.CBDT rescinded the old ICDS through notification no.CBDT rescinded the old ICDS through notification no. 86/2016 dated 2986/2016 dated 2986/2016 dated 2986/2016 dated 29thththth September 2016 and issuedSeptember 2016 and issuedSeptember 2016 and issuedSeptember 2016 and issued revised ICDS vide notification no. 87/2016 andrevised ICDS vide notification no. 87/2016 andrevised ICDS vide notification no. 87/2016 andrevised ICDS vide notification no. 87/2016 and amendedamendedamendedamended TTTTaxaxaxax AAAAudit Form 3CD.udit Form 3CD.udit Form 3CD.udit Form 3CD. Also issued FAQs dated 25Also issued FAQs dated 25Also issued FAQs dated 25Also issued FAQs dated 25thththth March 2017March 2017March 2017March 2017 DraftDraftDraftDraft ICDS on RealICDS on RealICDS on RealICDS on Real Estate Transaction released forEstate Transaction released forEstate Transaction released forEstate Transaction released for suggestionsuggestionsuggestionsuggestion ---- 11.05.201711.05.201711.05.201711.05.2017 CA. Pramod Jain
- 3. WHO TO FOLLOWWHOTO FOLLOWWHO TO FOLLOWWHO TO FOLLOW ICDSICDSICDSICDS AssesseeAssesseeAssesseeAssessee havinghavinghavinghaving PGBP &PGBP &PGBP &PGBP & OtherOtherOtherOther SourceSourceSourceSource incomeincomeincomeincome havinghavinghavinghaving Method ofMethod ofMethod ofMethod of AccountingAccountingAccountingAccounting MercantileMercantileMercantileMercantile Individual &Individual &Individual &Individual & HUFHUFHUFHUF Tax AuditTax AuditTax AuditTax Audit –––– To followTo followTo followTo follow ICDSICDSICDSICDS No TaxNo TaxNo TaxNo Tax AuditAuditAuditAudit –––– NoNoNoNo ICDSICDSICDSICDS OthersOthersOthersOthers To followTo followTo followTo follow ICDSICDSICDSICDS CashCashCashCash No ICDSNo ICDSNo ICDSNo ICDS CA. Pramod Jain
- 4. SUMMARYSUMMARYSUMMARYSUMMARY •Section 145(2)Section 145(2)Section145(2)Section 145(2)SourceSourceSourceSource •W.e.fW.e.fW.e.fW.e.f. AY 2017. AY 2017. AY 2017. AY 2017----18181818Effective DateEffective DateEffective DateEffective Date •Only on PGBP & Other SourceOnly on PGBP & Other SourceOnly on PGBP & Other SourceOnly on PGBP & Other Source •If accounts on mercantile basisIf accounts on mercantile basisIf accounts on mercantile basisIf accounts on mercantile basis Heads ofHeads ofHeads ofHeads of IncomeIncomeIncomeIncome •10 vide Not. Dt. 29.09.201610 vide Not. Dt. 29.09.201610 vide Not. Dt. 29.09.201610 vide Not. Dt. 29.09.2016 No. ofNo. ofNo. ofNo. of StandardsStandardsStandardsStandards •Para 13 of Form 3CD & ITRPara 13 of Form 3CD & ITRPara 13 of Form 3CD & ITRPara 13 of Form 3CD & ITRDisclosureDisclosureDisclosureDisclosure CA. Pramod Jain
- 5. CORRESPONDING AS /CORRESPONDINGAS /CORRESPONDING AS /CORRESPONDING AS / INDINDINDIND ASASASAS ICDICDICDICD SSSS Name of ICDSName of ICDSName of ICDSName of ICDS CorrespondiCorrespondiCorrespondiCorrespondi ng ASng ASng ASng AS CorrespondingCorrespondingCorrespondingCorresponding IndIndIndInd ASASASAS IIII Accounting PoliciesAccounting PoliciesAccounting PoliciesAccounting Policies 1 & 51 & 51 & 51 & 5 1111 & 8& 8& 8& 8 IIIIIIII Valuation of InventoriesValuation of InventoriesValuation of InventoriesValuation of Inventories 2222 2222 IIIIIIIIIIII Construction ContractsConstruction ContractsConstruction ContractsConstruction Contracts 7777 11111111 IVIVIVIV Revenue RecognitionRevenue RecognitionRevenue RecognitionRevenue Recognition 9999 11111111 VVVV Tangible Fixed AssetsTangible Fixed AssetsTangible Fixed AssetsTangible Fixed Assets 10101010 16161616 VIVIVIVI Changes in Foreign Exchange RatesChanges in Foreign Exchange RatesChanges in Foreign Exchange RatesChanges in Foreign Exchange Rates 11111111 21212121 VIIVIIVIIVII Government GrantsGovernment GrantsGovernment GrantsGovernment Grants 12121212 20202020 VIIIVIIIVIIIVIII SecuritiesSecuritiesSecuritiesSecurities 13131313 109109109109 IXIXIXIX Borrowing CostsBorrowing CostsBorrowing CostsBorrowing Costs 16161616 23232323 XXXX Provisions, Contingent Liabilities &Provisions, Contingent Liabilities &Provisions, Contingent Liabilities &Provisions, Contingent Liabilities & ContingentContingentContingentContingent AssetsAssetsAssetsAssets 29292929 37373737 CA. Pramod Jain
- 6. BASICSBASICSBASICSBASICS It’s for incomecomputation only and NOT forIt’s for income computation only and NOT forIt’s for income computation only and NOT forIt’s for income computation only and NOT for books maintenancebooks maintenancebooks maintenancebooks maintenance Is separate books to be maintained?Is separate books to be maintained?Is separate books to be maintained?Is separate books to be maintained? ICAI standards amendedICAI standards amendedICAI standards amendedICAI standards amended –––– Examples removedExamples removedExamples removedExamples removed Would it impact incomes u/s 44AD, 44AE,Would it impact incomes u/s 44AD, 44AE,Would it impact incomes u/s 44AD, 44AE,Would it impact incomes u/s 44AD, 44AE, etcetcetcetc???? FAQFAQFAQFAQ ---- ApplicableApplicableApplicableApplicable onononon partnership firm u/s 44ADpartnership firm u/s 44ADpartnership firm u/s 44ADpartnership firm u/s 44AD …wherever…wherever…wherever…wherever possiblepossiblepossiblepossible –––– exampleexampleexampleexample constructionconstructionconstructionconstruction contracts, revenue recognition??contracts, revenue recognition??contracts, revenue recognition??contracts, revenue recognition?? No ICDS details in ITR 1, 2 & 4No ICDS details in ITR 1, 2 & 4No ICDS details in ITR 1, 2 & 4No ICDS details in ITR 1, 2 & 4 Draft ICDS on Real Estate TransactionsDraft ICDS on Real Estate TransactionsDraft ICDS on Real Estate TransactionsDraft ICDS on Real Estate Transactions –––– 11.5.1711.5.1711.5.1711.5.17 CA. Pramod Jain
- 7. BASICSBASICSBASICSBASICS WouldWouldWouldWould it impactMAT / AMT??it impact MAT / AMT??it impact MAT / AMT??it impact MAT / AMT?? ICDS not to apply on MAT but applicable on AMTICDS not to apply on MAT but applicable on AMTICDS not to apply on MAT but applicable on AMTICDS not to apply on MAT but applicable on AMT –––– QQQQ 6 FAQ6 FAQ6 FAQ6 FAQ Take care of AS 22Take care of AS 22Take care of AS 22Take care of AS 22 What if assesse has no business income but onlyWhat if assesse has no business income but onlyWhat if assesse has no business income but onlyWhat if assesse has no business income but only income from other sources?income from other sources?income from other sources?income from other sources? What if has one business on mercantile basis andWhat if has one business on mercantile basis andWhat if has one business on mercantile basis andWhat if has one business on mercantile basis and other on cash ?other on cash ?other on cash ?other on cash ? Transitional provisionsTransitional provisionsTransitional provisionsTransitional provisions ---- neither double taxation norneither double taxation norneither double taxation norneither double taxation nor escapement ofescapement ofescapement ofescapement of incomeincomeincomeincome Disclosure requirementsDisclosure requirementsDisclosure requirementsDisclosure requirements CA. Pramod Jain
- 8. SEQUENCE OF PREVALENCESEQUENCEOF PREVALENCESEQUENCE OF PREVALENCESEQUENCE OF PREVALENCE ACTACTACTACT ICDSICDSICDSICDS RULESRULESRULESRULES JUDICIALJUDICIALJUDICIALJUDICIAL PRECEDENTSPRECEDENTSPRECEDENTSPRECEDENTS CA. Pramod Jain
- 9. STRUCTURESTRUCTURESTRUCTURESTRUCTURE CA. Pramod Jain PreamblePreamblePreamblePreamble ScopeScopeScopeScope ContentsContentsContentsContents TransitionalProvisionsTransitional ProvisionsTransitional ProvisionsTransitional Provisions DisclosureDisclosureDisclosureDisclosure
- 10. PREAMBLEPREAMBLEPREAMBLEPREAMBLE 1.1.1.1. ThisThisThisThis IncomeIncomeIncomeIncomeComputationComputationComputationComputation andandandand DisclosureDisclosureDisclosureDisclosure StandardStandardStandardStandard isisisis applicableapplicableapplicableapplicable forforforfor computationcomputationcomputationcomputation ofofofof incomeincomeincomeincome chargeablechargeablechargeablechargeable underunderunderunder thethethethe headheadheadhead "Profits"Profits"Profits"Profits andandandand gainsgainsgainsgains ofofofof businessbusinessbusinessbusiness orororor profession"profession"profession"profession" orororor "Income"Income"Income"Income fromfromfromfrom otherotherotherother sources"sources"sources"sources" andandandand notnotnotnot forforforfor thethethethe purposepurposepurposepurpose ofofofof maintenancemaintenancemaintenancemaintenance ofofofof booksbooksbooksbooks ofofofof accountaccountaccountaccount.... 2.2.2.2. InInInIn thethethethe casecasecasecase ofofofof conflictconflictconflictconflict betweenbetweenbetweenbetween thethethethe provisionsprovisionsprovisionsprovisions ofofofof thethethethe IncomeIncomeIncomeIncome----taxtaxtaxtax Act,Act,Act,Act, 1961196119611961 ('the('the('the('the Act')Act')Act')Act') andandandand thisthisthisthis IncomeIncomeIncomeIncome ComputationComputationComputationComputation andandandand DisclosureDisclosureDisclosureDisclosure Standard,Standard,Standard,Standard, thethethethe provisionsprovisionsprovisionsprovisions ofofofof thethethethe ActActActAct shallshallshallshall prevailprevailprevailprevail totototo thatthatthatthat extentextentextentextent.... CA. Pramod Jain
- 11. WHAT TO DOWHATTO DOWHAT TO DOWHAT TO DO Get the FSGet the FSGet the FSGet the FS preparedpreparedpreparedprepared complying AScomplying AScomplying AScomplying AS //// IndIndIndInd ASASASAS Check & ListCheck & ListCheck & ListCheck & List out theout theout theout the applicableapplicableapplicableapplicable ICDSICDSICDSICDS Note DifferencesNote DifferencesNote DifferencesNote Differences in accountingin accountingin accountingin accounting policy as per ASpolicy as per ASpolicy as per ASpolicy as per AS in books & ICDSin books & ICDSin books & ICDSin books & ICDS If different, effectIf different, effectIf different, effectIf different, effect on profit /loss toon profit /loss toon profit /loss toon profit /loss to be disclosed inbe disclosed inbe disclosed inbe disclosed in Form 3CD & ITRForm 3CD & ITRForm 3CD & ITRForm 3CD & ITR Is there anyIs there anyIs there anyIs there any adjustmentadjustmentadjustmentadjustment required inrequired inrequired inrequired in computation fromcomputation fromcomputation fromcomputation from Profit as per BooksProfit as per BooksProfit as per BooksProfit as per Books & IT?& IT?& IT?& IT? Does any ofDoes any ofDoes any ofDoes any of those relate tothose relate tothose relate tothose relate to any ICDS?any ICDS?any ICDS?any ICDS? If yes, disclosureIf yes, disclosureIf yes, disclosureIf yes, disclosure may be requiredmay be requiredmay be requiredmay be required in 3CD & ITR tooin 3CD & ITR tooin 3CD & ITR tooin 3CD & ITR too Verify relatedVerify relatedVerify relatedVerify related ICDSICDSICDSICDS disclosures indisclosures indisclosures indisclosures in Form 3CDForm 3CDForm 3CDForm 3CD Fill ICDS effectFill ICDS effectFill ICDS effectFill ICDS effect details in ITRdetails in ITRdetails in ITRdetails in ITR CA. Pramod Jain
- 12. ACCOUNTING POLICIESACCOUNTING POLICIESACCOUNTINGPOLICIESACCOUNTING POLICIES If in books as perIf in books as perIf in books as perIf in books as per AS /AS /AS /AS / IndIndIndInd ASASASAS Effect andEffect andEffect andEffect and disclosure indisclosure indisclosure indisclosure in Form 3CDForm 3CDForm 3CDForm 3CD CA. Pramod Jain If in books asIf in books asIf in books asIf in books as per ICDSper ICDSper ICDSper ICDS Qualify inQualify inQualify inQualify in Audit ReportAudit ReportAudit ReportAudit Report Disclosure inDisclosure inDisclosure inDisclosure in Form 3CDForm 3CDForm 3CDForm 3CD
- 13. ICDSICDSICDSICDS CHECKLISTCHECKLISTCHECKLISTCHECKLIST ICDICDICDICD SSSS Name ofICDSName of ICDSName of ICDSName of ICDS WhetherWhetherWhetherWhether ApplicableApplicableApplicableApplicable Amounts inAmounts inAmounts inAmounts in ITR & 3CDITR & 3CDITR & 3CDITR & 3CD DisclosurDisclosurDisclosurDisclosur es in 3CDes in 3CDes in 3CDes in 3CD RemaRemaRemaRema rksrksrksrks IIII Accounting PoliciesAccounting PoliciesAccounting PoliciesAccounting Policies YesYesYesYes IIIIIIII Valuation of InventoriesValuation of InventoriesValuation of InventoriesValuation of Inventories IIIIIIIIIIII Construction ContractsConstruction ContractsConstruction ContractsConstruction Contracts IVIVIVIV Revenue RecognitionRevenue RecognitionRevenue RecognitionRevenue Recognition YesYesYesYes VVVV Tangible Fixed AssetsTangible Fixed AssetsTangible Fixed AssetsTangible Fixed Assets VIVIVIVI Changes in Foreign ExchangeChanges in Foreign ExchangeChanges in Foreign ExchangeChanges in Foreign Exchange RatesRatesRatesRates VIIVIIVIIVII Government GrantsGovernment GrantsGovernment GrantsGovernment Grants VIIIVIIIVIIIVIII SecuritiesSecuritiesSecuritiesSecurities IXIXIXIX Borrowing CostsBorrowing CostsBorrowing CostsBorrowing Costs XXXX Provisions, ContingentProvisions, ContingentProvisions, ContingentProvisions, Contingent Liabilities& ContingentLiabilities& ContingentLiabilities& ContingentLiabilities& Contingent AssetsAssetsAssetsAssets CA. Pramod Jain
- 14. FORM 3CDFORM 3CDFORM3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE ---- 13131313 (a) Method of accounting employed in(a) Method of accounting employed in(a) Method of accounting employed in(a) Method of accounting employed in previous yearprevious yearprevious yearprevious year –––– Mercantile / cashMercantile / cashMercantile / cashMercantile / cash (b) Change in method of accounting applied(b) Change in method of accounting applied(b) Change in method of accounting applied(b) Change in method of accounting applied (c) If, yes, effect thereof on profit / loss(c) If, yes, effect thereof on profit / loss(c) If, yes, effect thereof on profit / loss(c) If, yes, effect thereof on profit / loss (Old d) Deviation in method of accounting(Old d) Deviation in method of accounting(Old d) Deviation in method of accounting(Old d) Deviation in method of accounting from accounting standards prescribed u/sfrom accounting standards prescribed u/sfrom accounting standards prescribed u/sfrom accounting standards prescribed u/s 145 and effect thereof on P/L145 and effect thereof on P/L145 and effect thereof on P/L145 and effect thereof on P/L ICDS reporting brought inICDS reporting brought inICDS reporting brought inICDS reporting brought in w.e.fw.e.fw.e.fw.e.f. 1.4.2017. 1.4.2017. 1.4.2017. 1.4.2017 CA. Pramod Jain
- 15. FORM 3CDFORM 3CDFORM3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE ---- 13131313 ((((d)d)d)d) –––– whether any adjustment is required towhether any adjustment is required towhether any adjustment is required towhether any adjustment is required to be made to the profits or loss for complyingbe made to the profits or loss for complyingbe made to the profits or loss for complyingbe made to the profits or loss for complying with the ICDS notified u/s 145(2)with the ICDS notified u/s 145(2)with the ICDS notified u/s 145(2)with the ICDS notified u/s 145(2) (e)(e)(e)(e) –––– Is, yes, give detailsIs, yes, give detailsIs, yes, give detailsIs, yes, give details (f)(f)(f)(f) –––– Disclosure as per ICDSDisclosure as per ICDSDisclosure as per ICDSDisclosure as per ICDS For 8 standardsFor 8 standardsFor 8 standardsFor 8 standards Two omitted as no disclosure required as perTwo omitted as no disclosure required as perTwo omitted as no disclosure required as perTwo omitted as no disclosure required as per the standard:the standard:the standard:the standard: Changes in Foreign Exchange RatesChanges in Foreign Exchange RatesChanges in Foreign Exchange RatesChanges in Foreign Exchange Rates SecuritiesSecuritiesSecuritiesSecurities CA. Pramod Jain
- 16. FORM 3CDFORM 3CDFORM3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE –––– 13(E)13(E)13(E)13(E) ICDICDICDICD SSSS Name of ICDSName of ICDSName of ICDSName of ICDS IncreaseIncreaseIncreaseIncrease in Profitin Profitin Profitin Profit DecreaseDecreaseDecreaseDecrease in Profitin Profitin Profitin Profit NetNetNetNet ((((RsRsRsRs.).).).) DescriptiDescriptiDescriptiDescripti onononon IIII Accounting PoliciesAccounting PoliciesAccounting PoliciesAccounting Policies 14141414 ChChChCh IIIIIIII Valuation of InventoriesValuation of InventoriesValuation of InventoriesValuation of Inventories IIIIIIIIIIII Construction ContractsConstruction ContractsConstruction ContractsConstruction Contracts IVIVIVIV Revenue RecognitionRevenue RecognitionRevenue RecognitionRevenue Recognition VVVV Tangible Fixed AssetsTangible Fixed AssetsTangible Fixed AssetsTangible Fixed Assets VIVIVIVI Changes in Foreign Exchange RatesChanges in Foreign Exchange RatesChanges in Foreign Exchange RatesChanges in Foreign Exchange Rates VIIVIIVIIVII Government GrantsGovernment GrantsGovernment GrantsGovernment Grants VIIIVIIIVIIIVIII SecuritiesSecuritiesSecuritiesSecurities IXIXIXIX Borrowing CostsBorrowing CostsBorrowing CostsBorrowing Costs XXXX Provisions, ContingentProvisions, ContingentProvisions, ContingentProvisions, Contingent LiabLiabLiabLiab & Assets& Assets& Assets& Assets TotalTotalTotalTotal CA. Pramod Jain
- 17. FORM 3CDFORM 3CDFORM3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE –––– 13(F)13(F)13(F)13(F) ICDS Name of ICDS Disclosures Descrip. I Accounting Policies 500 Character II Valuation of Inventories III Construction Contracts IV Revenue Recognition V Tangible Fixed Assets VII Government Grants IX Borrowing Costs X Provisions, Contingent Liab & Assets CA. Pramod Jain
- 18. ITRITRITRITR Schedule ICDS Effectof Income Computation Disclosure Standards on profit Sl. No. ICDS Amount (i) (ii) (iii) I Accounting Policies II Valuation of Inventories III Construction Contracts IV Revenue Recognition V Tangible Fixed Assets VI Changes in Foreign Exchange Rates VII Government Grants VIII Securities IX Borrowing Costs X Provisions, Contingent Liabilities and Contingent Assets XI Total Net effect (I+II+III+IV+V+VI+VII+VIII+IX+X) 0 Is there any impact of this disclosure onIs there any impact of this disclosure onIs there any impact of this disclosure onIs there any impact of this disclosure on Computation in ITR automatically?Computation in ITR automatically?Computation in ITR automatically?Computation in ITR automatically? CA. Pramod Jain
- 19. WHAT IFWHAT IFWHATIFWHAT IF ICDSICDSICDSICDS NOT FOLLOWEDNOT FOLLOWEDNOT FOLLOWEDNOT FOLLOWED Section 145(3Section 145(3Section 145(3Section 145(3)))) ---- AOAOAOAO has the power to make besthas the power to make besthas the power to make besthas the power to make best judgmentjudgmentjudgmentjudgment assessment u/s. 144 if he is notassessment u/s. 144 if he is notassessment u/s. 144 if he is notassessment u/s. 144 if he is not satisfied about thesatisfied about thesatisfied about thesatisfied about the ::::---- Correctness or completeness of the accounts ofCorrectness or completeness of the accounts ofCorrectness or completeness of the accounts ofCorrectness or completeness of the accounts of thethethethe assesseeassesseeassesseeassessee ; or; or; or; or MethodMethodMethodMethod of accounting is not regularly followedof accounting is not regularly followedof accounting is not regularly followedof accounting is not regularly followed ;;;;orororor IncomeIncomeIncomeIncome not computed as per ICDSnot computed as per ICDSnot computed as per ICDSnot computed as per ICDS HenceHenceHenceHence ICDS has to be mandatorily followed or elseICDS has to be mandatorily followed or elseICDS has to be mandatorily followed or elseICDS has to be mandatorily followed or else bestbestbestbest judgementjudgementjudgementjudgement assessment can be done byassessment can be done byassessment can be done byassessment can be done by Assessing OfficerAssessing OfficerAssessing OfficerAssessing Officer. CA. Pramod Jain
- 20. CBDT FAQS DT.25CBDT FAQS DT. 25CBDT FAQS DT. 25CBDT FAQS DT. 25THTHTHTH MARCH 2017MARCH 2017MARCH 2017MARCH 2017 Total 25 FAQsTotal 25 FAQsTotal 25 FAQsTotal 25 FAQs ICDS to apply onICDS to apply onICDS to apply onICDS to apply on IndIndIndInd AS FS tooAS FS tooAS FS tooAS FS too Applicable to all including bankApplicable to all including bankApplicable to all including bankApplicable to all including bank etcetcetcetc unlessunlessunlessunless specifiedspecifiedspecifiedspecified –––– like ICDS VIII (securities) forlike ICDS VIII (securities) forlike ICDS VIII (securities) forlike ICDS VIII (securities) for certain financial institutions & ICDS I forcertain financial institutions & ICDS I forcertain financial institutions & ICDS I forcertain financial institutions & ICDS I for Insurance businessInsurance businessInsurance businessInsurance business NoNoNoNo specific ICDS yet for real estatespecific ICDS yet for real estatespecific ICDS yet for real estatespecific ICDS yet for real estate developers & BOT projects and leases.developers & BOT projects and leases.developers & BOT projects and leases.developers & BOT projects and leases. Normal Act & ICDSNormal Act & ICDSNormal Act & ICDSNormal Act & ICDS applicableapplicableapplicableapplicable CA. Pramod Jain
- 21. CBDT FAQS DT.25CBDT FAQS DT. 25CBDT FAQS DT. 25CBDT FAQS DT. 25THTHTHTH MARCH 2017MARCH 2017MARCH 2017MARCH 2017 For Derivative contracts :For Derivative contracts :For Derivative contracts :For Derivative contracts : Forward contracts and similarForward contracts and similarForward contracts and similarForward contracts and similar ---- ICDS VIICDS VIICDS VIICDS VI [Foreign Exchange] subject to para 3 of ICDS[Foreign Exchange] subject to para 3 of ICDS[Foreign Exchange] subject to para 3 of ICDS[Foreign Exchange] subject to para 3 of ICDS VIII [securities]VIII [securities]VIII [securities]VIII [securities] For others ICDS IFor others ICDS IFor others ICDS IFor others ICDS I DisclosureDisclosureDisclosureDisclosure where to be madewhere to be madewhere to be madewhere to be made –––– Q 25Q 25Q 25Q 25 Net effect of ICDS to be disclosed inNet effect of ICDS to be disclosed inNet effect of ICDS to be disclosed inNet effect of ICDS to be disclosed in ITRITRITRITR Form 3CDForm 3CDForm 3CDForm 3CD No separate disclosures persons who areNo separate disclosures persons who areNo separate disclosures persons who areNo separate disclosures persons who are not liable for taxnot liable for taxnot liable for taxnot liable for tax auditauditauditaudit CA. Pramod Jain
- 22. IIII ---- ACCOUNTINGPOLICIESACCOUNTING POLICIESACCOUNTING POLICIESACCOUNTING POLICIES CA. Pramod Jain
- 23. ICDS IICDS IICDSIICDS I –––– ACCOUNTING POLICIESACCOUNTING POLICIESACCOUNTING POLICIESACCOUNTING POLICIES Accounting Policy or IncomeAccounting Policy or IncomeAccounting Policy or IncomeAccounting Policy or Income Computation???Computation???Computation???Computation??? All significant Accounting policiesAll significant Accounting policiesAll significant Accounting policiesAll significant Accounting policies Fundamental accountingFundamental accountingFundamental accountingFundamental accounting assumptions of going concern,assumptions of going concern,assumptions of going concern,assumptions of going concern, consistency and accrualconsistency and accrualconsistency and accrualconsistency and accrual CA. Pramod Jain
- 24. ICDS IICDS IICDSIICDS I –––– ACCOUNTING POLICIESACCOUNTING POLICIESACCOUNTING POLICIESACCOUNTING POLICIES No deduction of expected losses orNo deduction of expected losses orNo deduction of expected losses orNo deduction of expected losses or markedmarkedmarkedmarked to markedto markedto markedto marked loss unless as per other ICDSloss unless as per other ICDSloss unless as per other ICDSloss unless as per other ICDS Judicial Precedents:Judicial Precedents:Judicial Precedents:Judicial Precedents: DCITDCITDCITDCIT (International Taxation) v. Bank of Bahrain & Kuwait(International Taxation) v. Bank of Bahrain & Kuwait(International Taxation) v. Bank of Bahrain & Kuwait(International Taxation) v. Bank of Bahrain & Kuwait [2010] 41 SOT 290 (Mum) (SB)[2010] 41 SOT 290 (Mum) (SB)[2010] 41 SOT 290 (Mum) (SB)[2010] 41 SOT 290 (Mum) (SB) ---- LossLossLossLoss incurred onincurred onincurred onincurred on a/ca/ca/ca/c ofofofof evaluation of contract on last date ofevaluation of contract on last date ofevaluation of contract on last date ofevaluation of contract on last date of B/S is allowableB/S is allowableB/S is allowableB/S is allowable. AnticipatedAnticipatedAnticipatedAnticipated losseslosseslosseslosses allowed as deductionsallowed as deductionsallowed as deductionsallowed as deductions ‐‐‐‐ ABNABNABNABN AmroAmroAmroAmro SecuritiesSecuritiesSecuritiesSecurities IndIndIndInd (P.) Ltd.(P.) Ltd.(P.) Ltd.(P.) Ltd. v.ITOv.ITOv.ITOv.ITO [[[[2011]152011]152011]152011]15 taxmann.comtaxmann.comtaxmann.comtaxmann.com 177(Mum)177(Mum)177(Mum)177(Mum) MarkMarkMarkMark‐‐‐‐totototo‐‐‐‐market loss on derivatives held as stockmarket loss on derivatives held as stockmarket loss on derivatives held as stockmarket loss on derivatives held as stock‐‐‐‐inininin‐‐‐‐tradetradetradetrade allowedallowedallowedallowed ‐‐‐‐ DCITDCITDCITDCIT v.v.v.v. KotakKotakKotakKotak Mahindra [2013]Mahindra [2013]Mahindra [2013]Mahindra [2013] 35 taxmann.com 22535 taxmann.com 22535 taxmann.com 22535 taxmann.com 225 (Mumbai(Mumbai(Mumbai(Mumbai ‐‐‐‐ Trib.)Trib.)Trib.)Trib.) FAQFAQFAQFAQ ---- MarkedMarkedMarkedMarked to Market loss or expected loss as well asto Market loss or expected loss as well asto Market loss or expected loss as well asto Market loss or expected loss as well as MarkedMarkedMarkedMarked to Market gain or expected gain not to beto Market gain or expected gain not to beto Market gain or expected gain not to beto Market gain or expected gain not to be recognised unless as per ICDSrecognised unless as per ICDSrecognised unless as per ICDSrecognised unless as per ICDS CA. Pramod Jain
- 25. ICDS IICDS IICDSIICDS I –––– DISCLOSURESDISCLOSURESDISCLOSURESDISCLOSURES All significant accounting policiesAll significant accounting policiesAll significant accounting policiesAll significant accounting policies Change in accounting policy which has materialChange in accounting policy which has materialChange in accounting policy which has materialChange in accounting policy which has material effect including amount to the extent ascertainableeffect including amount to the extent ascertainableeffect including amount to the extent ascertainableeffect including amount to the extent ascertainable If change in accounting policy to have materialIf change in accounting policy to have materialIf change in accounting policy to have materialIf change in accounting policy to have material effect in later years, then disclosure to beeffect in later years, then disclosure to beeffect in later years, then disclosure to beeffect in later years, then disclosure to be made:made:made:made: InInInIn year of adoption as well asyear of adoption as well asyear of adoption as well asyear of adoption as well as IIIIn 1st yearn 1st yearn 1st yearn 1st year of material effectof material effectof material effectof material effect ---- not as per ASnot as per ASnot as per ASnot as per AS Disclosure or change in accounting policy cannotDisclosure or change in accounting policy cannotDisclosure or change in accounting policy cannotDisclosure or change in accounting policy cannot remedy a wrong or inappropriate treatment of itemremedy a wrong or inappropriate treatment of itemremedy a wrong or inappropriate treatment of itemremedy a wrong or inappropriate treatment of item IfIfIfIf fundamental accounting assumptions of goingfundamental accounting assumptions of goingfundamental accounting assumptions of goingfundamental accounting assumptions of going concern, consistency and accrual notconcern, consistency and accrual notconcern, consistency and accrual notconcern, consistency and accrual not followed.followed.followed.followed. CA. Pramod Jain
- 26. ICDS IICDS IICDSIICDS I –––– PRACTICAL IMPLICATIONSPRACTICAL IMPLICATIONSPRACTICAL IMPLICATIONSPRACTICAL IMPLICATIONS Disclosure of all significant accounting policies inDisclosure of all significant accounting policies inDisclosure of all significant accounting policies inDisclosure of all significant accounting policies in Clause 13 (f) of Form 3CD, wherever applicable:Clause 13 (f) of Form 3CD, wherever applicable:Clause 13 (f) of Form 3CD, wherever applicable:Clause 13 (f) of Form 3CD, wherever applicable: Give completeGive completeGive completeGive complete Where similar may refer of policies in notes to FSWhere similar may refer of policies in notes to FSWhere similar may refer of policies in notes to FSWhere similar may refer of policies in notes to FS Disallowances or deductions to be disclosed in ICDSDisallowances or deductions to be disclosed in ICDSDisallowances or deductions to be disclosed in ICDSDisallowances or deductions to be disclosed in ICDS schedule in Form 3CD as well as ITR (other thanschedule in Form 3CD as well as ITR (other thanschedule in Form 3CD as well as ITR (other thanschedule in Form 3CD as well as ITR (other than those covered by other ICDS):those covered by other ICDS):those covered by other ICDS):those covered by other ICDS): Marked to market loss / gainMarked to market loss / gainMarked to market loss / gainMarked to market loss / gain Expected lossesExpected lossesExpected lossesExpected losses Take care of change in accounting policies havingTake care of change in accounting policies havingTake care of change in accounting policies havingTake care of change in accounting policies having material effect in the year of effect too.material effect in the year of effect too.material effect in the year of effect too.material effect in the year of effect too. CA. Pramod Jain
- 27. FORM 3CDFORM 3CDFORM3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE –––– 13(E)13(E)13(E)13(E) ICDICDICDICD SSSS Name of ICDSName of ICDSName of ICDSName of ICDS Increase inIncrease inIncrease inIncrease in ProfitProfitProfitProfit DecreaseDecreaseDecreaseDecrease in Profitin Profitin Profitin Profit Net (Net (Net (Net (RsRsRsRs.).).).) DescriptionDescriptionDescriptionDescription IIII Accounting PoliciesAccounting PoliciesAccounting PoliciesAccounting Policies 2000200020002000 2000200020002000 Mark toMark toMark toMark to MarketMarketMarketMarket Loss onLoss onLoss onLoss on DerivativesDerivativesDerivativesDerivatives TotalTotalTotalTotal 2000200020002000 CA. Pramod Jain
- 28. FORM 3CDFORM 3CDFORM3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE –––– 13(F)13(F)13(F)13(F) ICDSICDSICDSICDS Name of ICDSName of ICDSName of ICDSName of ICDS DisclosuresDisclosuresDisclosuresDisclosures IIII Accounting PoliciesAccounting PoliciesAccounting PoliciesAccounting Policies • Refer to theRefer to theRefer to theRefer to the significantsignificantsignificantsignificant accounting policiesaccounting policiesaccounting policiesaccounting policies mentioned at Notementioned at Notementioned at Notementioned at Note No. _ toNo. _ toNo. _ toNo. _ to the Financialthe Financialthe Financialthe Financial StatementsStatementsStatementsStatements CA. Pramod Jain
- 29. IIIIIIII –––– VALUATIONOF INVENTORIESVALUATION OF INVENTORIESVALUATION OF INVENTORIESVALUATION OF INVENTORIES CA. Pramod Jain
- 30. ICDS IIICDS IIICDSIIICDS II –––– VALUATION OF INVENTORIESVALUATION OF INVENTORIESVALUATION OF INVENTORIESVALUATION OF INVENTORIES Inventory to be valued at cost or NRV whicheverInventory to be valued at cost or NRV whicheverInventory to be valued at cost or NRV whicheverInventory to be valued at cost or NRV whichever is lower.is lower.is lower.is lower. ByByByBy----products, scrap or waste material areproducts, scrap or waste material areproducts, scrap or waste material areproducts, scrap or waste material are immaterial, they shall be measured atimmaterial, they shall be measured atimmaterial, they shall be measured atimmaterial, they shall be measured at NRV andNRV andNRV andNRV and this value shall be deducted from the cost of thethis value shall be deducted from the cost of thethis value shall be deducted from the cost of thethis value shall be deducted from the cost of the main product.main product.main product.main product. Does not include WIP dealt by other ICDS.Does not include WIP dealt by other ICDS.Does not include WIP dealt by other ICDS.Does not include WIP dealt by other ICDS. Cost of inventories to include:Cost of inventories to include:Cost of inventories to include:Cost of inventories to include: Cost of purchases;Cost of purchases;Cost of purchases;Cost of purchases; Includes all duties & taxes . AS 2 excludes refundableIncludes all duties & taxes . AS 2 excludes refundableIncludes all duties & taxes . AS 2 excludes refundableIncludes all duties & taxes . AS 2 excludes refundable from taxing authoritiesfrom taxing authoritiesfrom taxing authoritiesfrom taxing authorities CA. Pramod Jain
- 31. ICDS IIICDS IIICDSIIICDS II –––– VALUATION OF INVENTORIESVALUATION OF INVENTORIESVALUATION OF INVENTORIESVALUATION OF INVENTORIES Costs of servicesCosts of servicesCosts of servicesCosts of services; (earlier for service provider, now; (earlier for service provider, now; (earlier for service provider, now; (earlier for service provider, now deleted)deleted)deleted)deleted) Includes labour and other costs of personnelIncludes labour and other costs of personnelIncludes labour and other costs of personnelIncludes labour and other costs of personnel directly engaged in providing the service includingdirectly engaged in providing the service includingdirectly engaged in providing the service includingdirectly engaged in providing the service including supervisory personnel and attributable overheadssupervisory personnel and attributable overheadssupervisory personnel and attributable overheadssupervisory personnel and attributable overheads Costs of conversion; andCosts of conversion; andCosts of conversion; andCosts of conversion; and OOOOtherthertherther costs incurred in bringing the inventories tocosts incurred in bringing the inventories tocosts incurred in bringing the inventories tocosts incurred in bringing the inventories to their present location and conditiontheir present location and conditiontheir present location and conditiontheir present location and condition Cost FormulaeCost FormulaeCost FormulaeCost Formulae Specific identification of costSpecific identification of costSpecific identification of costSpecific identification of cost FIFOFIFOFIFOFIFO Weighted AverageWeighted AverageWeighted AverageWeighted Average CA. Pramod Jain
- 32. ICDS IIICDS IIICDSIIICDS II –––– VALUATION OF INVENTORIESVALUATION OF INVENTORIESVALUATION OF INVENTORIESVALUATION OF INVENTORIES Techniques for measurement of cost:Techniques for measurement of cost:Techniques for measurement of cost:Techniques for measurement of cost: Standard CostStandard CostStandard CostStandard Cost Retail methodRetail methodRetail methodRetail method ((((An average percentage for eachAn average percentage for eachAn average percentage for eachAn average percentage for each retail department is to be used )retail department is to be used )retail department is to be used )retail department is to be used ) ICDSICDSICDSICDS ---- MachineryMachineryMachineryMachinery spares, which can be used onlyspares, which can be used onlyspares, which can be used onlyspares, which can be used only in connection with a tangible fixed asset and theirin connection with a tangible fixed asset and theirin connection with a tangible fixed asset and theirin connection with a tangible fixed asset and their use is expected to be irregular,use is expected to be irregular,use is expected to be irregular,use is expected to be irregular, totototo be dealt with inbe dealt with inbe dealt with inbe dealt with in accordance with theaccordance with theaccordance with theaccordance with the ICDS V (TangibleICDS V (TangibleICDS V (TangibleICDS V (Tangible fixedfixedfixedfixed assets)assets)assets)assets) The New AS 10 PPE read with new AS 2The New AS 10 PPE read with new AS 2The New AS 10 PPE read with new AS 2The New AS 10 PPE read with new AS 2 –––– FA ifFA ifFA ifFA if expected to be used for more than 12 monthsexpected to be used for more than 12 monthsexpected to be used for more than 12 monthsexpected to be used for more than 12 months CA. Pramod Jain
- 33. ICDS IIICDS IIICDSIIICDS II –––– TAX DUTIESTAX DUTIESTAX DUTIESTAX DUTIES ASASASAS: The costs of purchase shall consist ofThe costs of purchase shall consist ofThe costs of purchase shall consist ofThe costs of purchase shall consist of purchase price including dutiespurchase price including dutiespurchase price including dutiespurchase price including duties &&&& taxestaxestaxestaxes (other(other(other(other than those subsequently recoverable by thethan those subsequently recoverable by thethan those subsequently recoverable by thethan those subsequently recoverable by the enterprise from the taxing authorities),enterprise from the taxing authorities),enterprise from the taxing authorities),enterprise from the taxing authorities), freightfreightfreightfreight inwardsinwardsinwardsinwards &&&& other expenditure directly attributableother expenditure directly attributableother expenditure directly attributableother expenditure directly attributable to the acquisition. (Exclusive method).to the acquisition. (Exclusive method).to the acquisition. (Exclusive method).to the acquisition. (Exclusive method). ICDSICDSICDSICDS: The costs of purchase shall consist of: The costs of purchase shall consist of: The costs of purchase shall consist of: The costs of purchase shall consist of purchase price including duties and taxes, freightpurchase price including duties and taxes, freightpurchase price including duties and taxes, freightpurchase price including duties and taxes, freight inwardsinwardsinwardsinwards & other& other& other& other expenditure directly attributableexpenditure directly attributableexpenditure directly attributableexpenditure directly attributable to the acquisition. (Inclusive method)to the acquisition. (Inclusive method)to the acquisition. (Inclusive method)to the acquisition. (Inclusive method) Already under SAlready under SAlready under SAlready under S.... 145A since 1.4.1999145A since 1.4.1999145A since 1.4.1999145A since 1.4.1999 CA. Pramod Jain
- 34. ICDS IIICDS IIICDSIIICDS II –––– TAX DUTIESTAX DUTIESTAX DUTIESTAX DUTIES CA. Pramod Jain Sl.Sl.Sl.Sl. No.No.No.No. ParticularsParticularsParticularsParticulars IncreaseIncreaseIncreaseIncrease in profitin profitin profitin profit ((((RsRsRsRs)))) DecreaseDecreaseDecreaseDecrease in profitin profitin profitin profit ((((RsRsRsRs)))) 1111 Increase in cost of opening stock onIncrease in cost of opening stock onIncrease in cost of opening stock onIncrease in cost of opening stock on inclusion of excise duty on which CEN VATinclusion of excise duty on which CEN VATinclusion of excise duty on which CEN VATinclusion of excise duty on which CEN VAT credit iscredit iscredit iscredit is available/availedavailable/availedavailable/availedavailable/availed 20202020 2222 Increase in purchase cost of raw materialIncrease in purchase cost of raw materialIncrease in purchase cost of raw materialIncrease in purchase cost of raw material onononon inclusion of excise duty on which CENinclusion of excise duty on which CENinclusion of excise duty on which CENinclusion of excise duty on which CEN VAT credit isVAT credit isVAT credit isVAT credit is available/availedavailable/availedavailable/availedavailable/availed 180180180180 3333 Increase in sales of finished goods onIncrease in sales of finished goods onIncrease in sales of finished goods onIncrease in sales of finished goods on inclusioninclusioninclusioninclusion of excise dutyof excise dutyof excise dutyof excise duty 180180180180 4444 Excise duty paid on saleExcise duty paid on saleExcise duty paid on saleExcise duty paid on sale of finished goodsof finished goodsof finished goodsof finished goods as a result of its inclusion in salesas a result of its inclusion in salesas a result of its inclusion in salesas a result of its inclusion in sales ---- 180180180180
- 35. ICDS IIICDS IIICDSIIICDS II –––– TAX DUTIESTAX DUTIESTAX DUTIESTAX DUTIES CA. Pramod Jain 5555 IncreaseIncreaseIncreaseIncrease inininin closingclosingclosingclosing stockstockstockstock ofofofof rawrawrawraw materialmaterialmaterialmaterial onononon inclusioninclusioninclusioninclusion ofofofof exciseexciseexciseexcise dutydutydutyduty 40404040 ---- 6666 IncreaseIncreaseIncreaseIncrease inininin closingclosingclosingclosing stockstockstockstock ofofofof finishedfinishedfinishedfinished goodsgoodsgoodsgoods onononon inclusioninclusioninclusioninclusion ofofofof exciseexciseexciseexcise dutydutydutyduty 60606060 ---- 7777 IncreaseIncreaseIncreaseIncrease inininin exciseexciseexciseexcise dutydutydutyduty onononon closingclosingclosingclosing stockstockstockstock ofofofof finishedfinishedfinishedfinished goodsgoodsgoodsgoods asasasas aaaa resultresultresultresult ofofofof itsitsitsits inclusioninclusioninclusioninclusion inininin closingclosingclosingclosing stockstockstockstock ofofofof finishedfinishedfinishedfinished goodsgoodsgoodsgoods ---- 60606060 8888 AccountingAccountingAccountingAccounting ofofofof CENVTCENVTCENVTCENVT creditcreditcreditcredit availedavailedavailedavailed andandandand utilisedutilisedutilisedutilised onononon rawrawrawraw materialsmaterialsmaterialsmaterials consumedconsumedconsumedconsumed inininin paymentpaymentpaymentpayment ofofofof exciseexciseexciseexcise dutydutydutyduty onononon finishedfinishedfinishedfinished goodsgoodsgoodsgoods accountedaccountedaccountedaccounted onononon thethethethe basisbasisbasisbasis ofofofof rawrawrawraw materialmaterialmaterialmaterial consumedconsumedconsumedconsumed 160160160160 ---- TotalTotalTotalTotal 440440440440 440440440440
- 36. ICDS IIICDS IIICDSIIICDS II –––– PARTNERSHIP FIRMSPARTNERSHIP FIRMSPARTNERSHIP FIRMSPARTNERSHIP FIRMS InInInIn case of dissolution of a partnership firm or AOP / BOI,case of dissolution of a partnership firm or AOP / BOI,case of dissolution of a partnership firm or AOP / BOI,case of dissolution of a partnership firm or AOP / BOI, notwithstanding whether business is discontinued ornotwithstanding whether business is discontinued ornotwithstanding whether business is discontinued ornotwithstanding whether business is discontinued or not, the inventory on the date of dissolution shall benot, the inventory on the date of dissolution shall benot, the inventory on the date of dissolution shall benot, the inventory on the date of dissolution shall be valued at thevalued at thevalued at thevalued at the NRV.NRV.NRV.NRV. Judicial Precedents:Judicial Precedents:Judicial Precedents:Judicial Precedents: In cases of dissolution of firm, the stockIn cases of dissolution of firm, the stockIn cases of dissolution of firm, the stockIn cases of dissolution of firm, the stock‐‐‐‐inininin----trade will have to betrade will have to betrade will have to betrade will have to be valued at the prevailing market price while preparing a/valued at the prevailing market price while preparing a/valued at the prevailing market price while preparing a/valued at the prevailing market price while preparing a/cscscscs ifififif the business of firm is discontinuedthe business of firm is discontinuedthe business of firm is discontinuedthe business of firm is discontinued---- A.L.A. Firm v. CIT [1991] 55A.L.A. Firm v. CIT [1991] 55A.L.A. Firm v. CIT [1991] 55A.L.A. Firm v. CIT [1991] 55 Taxman 497(SC)Taxman 497(SC)Taxman 497(SC)Taxman 497(SC) WhereWhereWhereWhere firm got dissolved due to death of a partnerfirm got dissolved due to death of a partnerfirm got dissolved due to death of a partnerfirm got dissolved due to death of a partner &business&business&business&business was reconstituted withwas reconstituted withwas reconstituted withwas reconstituted with remaining partners &remaining partners &remaining partners &remaining partners & businessbusinessbusinessbusiness continued without any interruption,continued without any interruption,continued without any interruption,continued without any interruption, closingclosingclosingclosing stock was to bestock was to bestock was to bestock was to be valued atvalued atvalued atvalued at costcostcostcost orororor MP,MP,MP,MP, whichever was lower,whichever was lower,whichever was lower,whichever was lower, &&&& not at marketnot at marketnot at marketnot at market valuevaluevaluevalue ----SakthiSakthiSakthiSakthi Trading Co. v. CIT [2001] 118 Taxman 301 (SC)Trading Co. v. CIT [2001] 118 Taxman 301 (SC)Trading Co. v. CIT [2001] 118 Taxman 301 (SC)Trading Co. v. CIT [2001] 118 Taxman 301 (SC) CA. Pramod Jain
- 37. ICDS IIICDS IIICDSIIICDS II –––– VALUATION OF INVENTORIESVALUATION OF INVENTORIESVALUATION OF INVENTORIESVALUATION OF INVENTORIES NoNoNoNo Interest /borrowing cost unless as per ICDSInterest /borrowing cost unless as per ICDSInterest /borrowing cost unless as per ICDSInterest /borrowing cost unless as per ICDS IXIXIXIX Where inventories require a period of 12 months orWhere inventories require a period of 12 months orWhere inventories require a period of 12 months orWhere inventories require a period of 12 months or more to bring them to a saleable conditionmore to bring them to a saleable conditionmore to bring them to a saleable conditionmore to bring them to a saleable condition ValueValueValueValue of the inventory asof the inventory asof the inventory asof the inventory as onononon beginning ofbeginning ofbeginning ofbeginning of PYPYPYPY shallshallshallshall be:be:be:be: CCCCostostostost of inventoryof inventoryof inventoryof inventory available, if any,available, if any,available, if any,available, if any, onononon day ofday ofday ofday of commencement ofcommencement ofcommencement ofcommencement of business when the business hasbusiness when the business hasbusiness when the business hasbusiness when the business has commenced during thecommenced during thecommenced during thecommenced during the PY;PY;PY;PY; ValueValueValueValue of the inventory as on the close of theof the inventory as on the close of theof the inventory as on the close of theof the inventory as on the close of the immediately precedingimmediately precedingimmediately precedingimmediately preceding PY,PY,PY,PY, in any other case.in any other case.in any other case.in any other case. CA. Pramod Jain
- 38. ICDS IIICDS IIICDSIIICDS II –––– DISCLOSURESDISCLOSURESDISCLOSURESDISCLOSURES AccountingAccountingAccountingAccounting policies adopted in measuringpolicies adopted in measuringpolicies adopted in measuringpolicies adopted in measuring inventories including the cost formulae used.inventories including the cost formulae used.inventories including the cost formulae used.inventories including the cost formulae used. Where Standard Costing has been used as aWhere Standard Costing has been used as aWhere Standard Costing has been used as aWhere Standard Costing has been used as a measurement of cost, details of such inventoriesmeasurement of cost, details of such inventoriesmeasurement of cost, details of such inventoriesmeasurement of cost, details of such inventories and a confirmation of the fact that standardand a confirmation of the fact that standardand a confirmation of the fact that standardand a confirmation of the fact that standard cost approximates the actual costcost approximates the actual costcost approximates the actual costcost approximates the actual cost;;;; TheTheTheThe total carrying amount of inventories and itstotal carrying amount of inventories and itstotal carrying amount of inventories and itstotal carrying amount of inventories and its classification appropriate to a person.classification appropriate to a person.classification appropriate to a person.classification appropriate to a person. ASASASAS –––– same as above except underlined contentsame as above except underlined contentsame as above except underlined contentsame as above except underlined content CA. Pramod Jain
- 39. ICDS IIICDS IIICDSIIICDS II –––– PRACTICAL IMPLICATIONPRACTICAL IMPLICATIONPRACTICAL IMPLICATIONPRACTICAL IMPLICATION DisclosuresDisclosuresDisclosuresDisclosures Same as per AS 2, but if standard cost used..Same as per AS 2, but if standard cost used..Same as per AS 2, but if standard cost used..Same as per AS 2, but if standard cost used.. State whether it approximates the actual costState whether it approximates the actual costState whether it approximates the actual costState whether it approximates the actual cost Carrying amount??Carrying amount??Carrying amount??Carrying amount?? If there is change in method of valuation ofIf there is change in method of valuation ofIf there is change in method of valuation ofIf there is change in method of valuation of inventory its change in accounting policy…inventory its change in accounting policy…inventory its change in accounting policy…inventory its change in accounting policy… follow AS 1 disclosurefollow AS 1 disclosurefollow AS 1 disclosurefollow AS 1 disclosure Take care at time of dissolution of partnershipTake care at time of dissolution of partnershipTake care at time of dissolution of partnershipTake care at time of dissolution of partnership firmfirmfirmfirm CA. Pramod Jain
- 40. ICDS IIICDS IIICDSIIICDS II –––– PRACTICAL IMPLICATIONPRACTICAL IMPLICATIONPRACTICAL IMPLICATIONPRACTICAL IMPLICATION Disclosure for not following inclusive method ofDisclosure for not following inclusive method ofDisclosure for not following inclusive method ofDisclosure for not following inclusive method of valuation of inventoryvaluation of inventoryvaluation of inventoryvaluation of inventory –––– nonnonnonnon----compliance of s.compliance of s.compliance of s.compliance of s. 145A145A145A145A –––– already reporting at Paraalready reporting at Paraalready reporting at Paraalready reporting at Para 14(b)14(b)14(b)14(b) of Formof Formof Formof Form 3CD3CD3CD3CD–––– refer Para 23 of ICAI Tax Audit Guidancerefer Para 23 of ICAI Tax Audit Guidancerefer Para 23 of ICAI Tax Audit Guidancerefer Para 23 of ICAI Tax Audit Guidance NoteNoteNoteNote BorrowingBorrowingBorrowingBorrowing costs for inventories only if theycosts for inventories only if theycosts for inventories only if theycosts for inventories only if they require a period of 12 months or more to bringrequire a period of 12 months or more to bringrequire a period of 12 months or more to bringrequire a period of 12 months or more to bring them to a saleable conditionthem to a saleable conditionthem to a saleable conditionthem to a saleable condition CA. Pramod Jain
- 41. FORM 3CDFORM 3CDFORM3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE –––– 13(E)13(E)13(E)13(E) ICDICDICDICD SSSS Name of ICDSName of ICDSName of ICDSName of ICDS IncreaseIncreaseIncreaseIncrease in Profitin Profitin Profitin Profit DecreaseDecreaseDecreaseDecrease in Profitin Profitin Profitin Profit Net (Net (Net (Net (RsRsRsRs.).).).) DescriptionDescriptionDescriptionDescription IIIIIIII Valuation ofValuation ofValuation ofValuation of InventoriesInventoriesInventoriesInventories 10000100001000010000 10000100001000010000 • Difference overDifference overDifference overDifference over cost to NRV incost to NRV incost to NRV incost to NRV in case of dissolutioncase of dissolutioncase of dissolutioncase of dissolution of firm. Valued atof firm. Valued atof firm. Valued atof firm. Valued at lower in bookslower in bookslower in bookslower in books TotalTotalTotalTotal 10000100001000010000 CA. Pramod Jain
- 42. FORM 3CDFORM 3CDFORM3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE –––– 13(F)13(F)13(F)13(F) ICDSICDSICDSICDS Name of ICDSName of ICDSName of ICDSName of ICDS DisclosuresDisclosuresDisclosuresDisclosures IIIIIIII Valuation ofValuation ofValuation ofValuation of InventoriesInventoriesInventoriesInventories • Refer to the significant accountingRefer to the significant accountingRefer to the significant accountingRefer to the significant accounting policies mentioned at Note No. _ topolicies mentioned at Note No. _ topolicies mentioned at Note No. _ topolicies mentioned at Note No. _ to the Financial Statementsthe Financial Statementsthe Financial Statementsthe Financial Statements • For carrying amount and classificationFor carrying amount and classificationFor carrying amount and classificationFor carrying amount and classification refer Note No. _ of Balance Sheetrefer Note No. _ of Balance Sheetrefer Note No. _ of Balance Sheetrefer Note No. _ of Balance Sheet • Inventories are not inclusive of dutiesInventories are not inclusive of dutiesInventories are not inclusive of dutiesInventories are not inclusive of duties and taxes, yet there is no effect onand taxes, yet there is no effect onand taxes, yet there is no effect onand taxes, yet there is no effect on profits, refer toprofits, refer toprofits, refer toprofits, refer to Para 14(b) of FormPara 14(b) of FormPara 14(b) of FormPara 14(b) of Form 3CD3CD3CD3CD • TheTheTheThe assesseeassesseeassesseeassessee is followingis followingis followingis following StandardStandardStandardStandard Costing as a measurement of cost,Costing as a measurement of cost,Costing as a measurement of cost,Costing as a measurement of cost, and that approximates the actual costand that approximates the actual costand that approximates the actual costand that approximates the actual cost CA. Pramod Jain
- 43. IIIIIIIIIIII –––– CONSTRUCTIONCONTRACTSCONSTRUCTION CONTRACTSCONSTRUCTION CONTRACTSCONSTRUCTION CONTRACTS CA. Pramod Jain
- 44. ICDSICDSICDSICDS IIIIIIIIIIII ––––CONSTRUCTION CONTRACTSCONSTRUCTION CONTRACTSCONSTRUCTION CONTRACTSCONSTRUCTION CONTRACTS Retention money being part of overall contract toRetention money being part of overall contract toRetention money being part of overall contract toRetention money being part of overall contract to be recognised subject to reasonable certainty ofbe recognised subject to reasonable certainty ofbe recognised subject to reasonable certainty ofbe recognised subject to reasonable certainty of its ultimate collection as per para 9its ultimate collection as per para 9its ultimate collection as per para 9its ultimate collection as per para 9 –––– FAQFAQFAQFAQ ––––Q11Q11Q11Q11 ContractContractContractContract Costs shall be reduced by any incidentalCosts shall be reduced by any incidentalCosts shall be reduced by any incidentalCosts shall be reduced by any incidental income, not being in the nature of interest,income, not being in the nature of interest,income, not being in the nature of interest,income, not being in the nature of interest, dividends or capital gains, that is not included individends or capital gains, that is not included individends or capital gains, that is not included individends or capital gains, that is not included in contract revenuecontract revenuecontract revenuecontract revenue .... AS 7 does not mention these, but gives examplesAS 7 does not mention these, but gives examplesAS 7 does not mention these, but gives examplesAS 7 does not mention these, but gives examples that can be reduced of sale of surplus materials,that can be reduced of sale of surplus materials,that can be reduced of sale of surplus materials,that can be reduced of sale of surplus materials, disposal of Plantdisposal of Plantdisposal of Plantdisposal of Plant etcetcetcetc at end of contract.at end of contract.at end of contract.at end of contract. CA. Pramod Jain
- 45. ICDSICDSICDSICDS IIIIIIIIIIII ––––CONSTRUCTION CONTRACTSCONSTRUCTION CONTRACTSCONSTRUCTION CONTRACTSCONSTRUCTION CONTRACTS During the early stages of a contract, where theDuring the early stages of a contract, where theDuring the early stages of a contract, where theDuring the early stages of a contract, where the outcome of the contract cannot be estimated reliablyoutcome of the contract cannot be estimated reliablyoutcome of the contract cannot be estimated reliablyoutcome of the contract cannot be estimated reliably contract revenue is recognised only to the extent ofcontract revenue is recognised only to the extent ofcontract revenue is recognised only to the extent ofcontract revenue is recognised only to the extent of costs incurred. Same ascosts incurred. Same ascosts incurred. Same ascosts incurred. Same as ASASASAS 7777 PercentagePercentagePercentagePercentage completion method to be adopted. Samecompletion method to be adopted. Samecompletion method to be adopted. Samecompletion method to be adopted. Same asasasas ASASASAS 7 except7 except7 except7 except –––– whenwhenwhenwhen outcome of a constructionoutcome of a constructionoutcome of a constructionoutcome of a construction contract can be estimated reliablycontract can be estimated reliablycontract can be estimated reliablycontract can be estimated reliably TheTheTheThe early stage of a contract shall not extend beyondearly stage of a contract shall not extend beyondearly stage of a contract shall not extend beyondearly stage of a contract shall not extend beyond 25 % of the stage of25 % of the stage of25 % of the stage of25 % of the stage of completion.completion.completion.completion. outcome of aoutcome of aoutcome of aoutcome of a construction contract estimation not requiredconstruction contract estimation not requiredconstruction contract estimation not requiredconstruction contract estimation not required ICDSICDSICDSICDS ----ExpectedExpectedExpectedExpected losses not to be recognisedlosses not to be recognisedlosses not to be recognisedlosses not to be recognised –––– AS 7AS 7AS 7AS 7 –––– totototo provide on prudence immediately. ICDS is also contraryprovide on prudence immediately. ICDS is also contraryprovide on prudence immediately. ICDS is also contraryprovide on prudence immediately. ICDS is also contrary totototo Delhi HCDelhi HCDelhi HCDelhi HC & Gujarat HC& Gujarat HC& Gujarat HC& Gujarat HC judgementsjudgementsjudgementsjudgements CA. Pramod Jain
- 46. ICDSICDSICDSICDS IIIIIIIIIIII ––––CONSTRUCTION CONTRACTSCONSTRUCTION CONTRACTSCONSTRUCTION CONTRACTSCONSTRUCTION CONTRACTS Implication of nonImplication of nonImplication of nonImplication of non –––– allowance of expectedallowance of expectedallowance of expectedallowance of expected loss.loss.loss.loss. Example :Example :Example :Example :---- Expected loss in the year 1Expected loss in the year 1Expected loss in the year 1Expected loss in the year 1stststst year of a 3 year contractyear of a 3 year contractyear of a 3 year contractyear of a 3 year contract waswaswaswas RsRsRsRs . 300.. 300.. 300.. 300. Actual Loss on completion of the contract in the thirdActual Loss on completion of the contract in the thirdActual Loss on completion of the contract in the thirdActual Loss on completion of the contract in the third year wasyear wasyear wasyear was RsRsRsRs. 240.. 240.. 240.. 240. Without any actual income there would be taxableWithout any actual income there would be taxableWithout any actual income there would be taxableWithout any actual income there would be taxable income u/s 115 JB.income u/s 115 JB.income u/s 115 JB.income u/s 115 JB. YearYearYearYear Book ProfitBook ProfitBook ProfitBook Profit As per Income TaxAs per Income TaxAs per Income TaxAs per Income Tax 1111 (300)(300)(300)(300) (100)(100)(100)(100) 2222 ---- (100)(100)(100)(100) 3333 60606060 (40)(40)(40)(40) CA. Pramod Jain
- 47. ICDSICDSICDSICDS IIIIIIIIIIII ––––DISCLOSURESDISCLOSURESDISCLOSURESDISCLOSURES The amount of contract revenue recognised asThe amount of contract revenue recognised asThe amount of contract revenue recognised asThe amount of contract revenue recognised as revenue in the period; andrevenue in the period; andrevenue in the period; andrevenue in the period; and The methods used to determine the stage ofThe methods used to determine the stage ofThe methods used to determine the stage ofThe methods used to determine the stage of completion of contracts in progress.completion of contracts in progress.completion of contracts in progress.completion of contracts in progress. For contracts in progress at the reporting date,For contracts in progress at the reporting date,For contracts in progress at the reporting date,For contracts in progress at the reporting date, namely:namely:namely:namely:———— AmountAmountAmountAmount of costs incurred and recognised profits (lessof costs incurred and recognised profits (lessof costs incurred and recognised profits (lessof costs incurred and recognised profits (less recognised losses)recognised losses)recognised losses)recognised losses) uptouptouptoupto the reporting date;the reporting date;the reporting date;the reporting date; AmountAmountAmountAmount of advances received; andof advances received; andof advances received; andof advances received; and AmountAmountAmountAmount of retentionsof retentionsof retentionsof retentions. ASASASAS –––– same + methods used to determine contractsame + methods used to determine contractsame + methods used to determine contractsame + methods used to determine contract revenue recognized during the periodrevenue recognized during the periodrevenue recognized during the periodrevenue recognized during the period CA. Pramod Jain
- 48. ICDSICDSICDSICDS IIIIIIIIIIII ––––PRACTICAL IMPLICATIONSPRACTICAL IMPLICATIONSPRACTICAL IMPLICATIONSPRACTICAL IMPLICATIONS Retentions to be recognised on percentageRetentions to be recognised on percentageRetentions to be recognised on percentageRetentions to be recognised on percentage completion method through ICDScompletion method through ICDScompletion method through ICDScompletion method through ICDS Expected losses to be added back toExpected losses to be added back toExpected losses to be added back toExpected losses to be added back to computation and disclosure through ICDScomputation and disclosure through ICDScomputation and disclosure through ICDScomputation and disclosure through ICDS Contract costs not to be reduced byContract costs not to be reduced byContract costs not to be reduced byContract costs not to be reduced by interest,interest,interest,interest, dividends or capital gains. To be charged directlydividends or capital gains. To be charged directlydividends or capital gains. To be charged directlydividends or capital gains. To be charged directly to revenueto revenueto revenueto revenue CA. Pramod Jain
- 49. FORM 3CDFORM 3CDFORM3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE –––– 13(E)13(E)13(E)13(E) ICDICDICDICD SSSS Name of ICDSName of ICDSName of ICDSName of ICDS Increase inIncrease inIncrease inIncrease in ProfitProfitProfitProfit DecreaseDecreaseDecreaseDecrease in Profitin Profitin Profitin Profit Net (Net (Net (Net (RsRsRsRs.).).).) DescriptionDescriptionDescriptionDescription IIIIIIIIIIII ConstructionConstructionConstructionConstruction ContractsContractsContractsContracts 10000100001000010000 10000100001000010000 • RetentionRetentionRetentionRetention s nots nots nots not chargedchargedchargedcharged to revenueto revenueto revenueto revenue ----4000400040004000 • ExpectedExpectedExpectedExpected losseslosseslosseslosses chargedchargedchargedcharged to PL asto PL asto PL asto PL as per AS 7per AS 7per AS 7per AS 7 ---- 6000600060006000 TotalTotalTotalTotal 10000100001000010000 CA. Pramod Jain
- 50. FORM 3CDFORM 3CDFORM3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE –––– 13(F)13(F)13(F)13(F) ICDSICDSICDSICDS Name of ICDSName of ICDSName of ICDSName of ICDS DisclosuresDisclosuresDisclosuresDisclosures IIIIIIIIIIII ConstructionConstructionConstructionConstruction ContractsContractsContractsContracts • Refer to the significantRefer to the significantRefer to the significantRefer to the significant accounting policiesaccounting policiesaccounting policiesaccounting policies mentioned at Note No. _mentioned at Note No. _mentioned at Note No. _mentioned at Note No. _ totototo the Financialthe Financialthe Financialthe Financial StatementsStatementsStatementsStatements • ForForForFor amount of contractamount of contractamount of contractamount of contract revenue recognised asrevenue recognised asrevenue recognised asrevenue recognised as revenue in the periodrevenue in the periodrevenue in the periodrevenue in the period refer Note No. _ of PLrefer Note No. _ of PLrefer Note No. _ of PLrefer Note No. _ of PL CA. Pramod Jain
- 51. IVIVIVIV –––– REVENUERECOGNITIONREVENUE RECOGNITIONREVENUE RECOGNITIONREVENUE RECOGNITION CA. Pramod Jain
- 52. ICDS IVICDS IVICDSIVICDS IV –––– REVENUE RECOGNITIONREVENUE RECOGNITIONREVENUE RECOGNITIONREVENUE RECOGNITION Revenue for sale of goodsRevenue for sale of goodsRevenue for sale of goodsRevenue for sale of goods –––– AS 9AS 9AS 9AS 9 –––– ….. when no significant uncertainty exists….. when no significant uncertainty exists….. when no significant uncertainty exists….. when no significant uncertainty exists regarding amount of consideration that will beregarding amount of consideration that will beregarding amount of consideration that will beregarding amount of consideration that will be derived ..derived ..derived ..derived .. ICDS IVICDS IVICDS IVICDS IV ---- when there is reasonable certainty of itswhen there is reasonable certainty of itswhen there is reasonable certainty of itswhen there is reasonable certainty of its ultimate collection …..ultimate collection …..ultimate collection …..ultimate collection ….. In AS & ICDSIn AS & ICDSIn AS & ICDSIn AS & ICDS ---- WhereWhereWhereWhere the ability to assess thethe ability to assess thethe ability to assess thethe ability to assess the ultimate collection with reasonable certainty isultimate collection with reasonable certainty isultimate collection with reasonable certainty isultimate collection with reasonable certainty is lacking at the time of raising any claim forlacking at the time of raising any claim forlacking at the time of raising any claim forlacking at the time of raising any claim for escalation of price and export incentives, revenueescalation of price and export incentives, revenueescalation of price and export incentives, revenueescalation of price and export incentives, revenue recognition in respect of such claim shall berecognition in respect of such claim shall berecognition in respect of such claim shall berecognition in respect of such claim shall be postponed to the extent of uncertainty involvedpostponed to the extent of uncertainty involvedpostponed to the extent of uncertainty involvedpostponed to the extent of uncertainty involved CA. Pramod Jain
- 53. ICDS IVICDS IVICDSIVICDS IV –––– REVENUE RECOGNITIONREVENUE RECOGNITIONREVENUE RECOGNITIONREVENUE RECOGNITION For Service Contracts, AS allows both methods:For Service Contracts, AS allows both methods:For Service Contracts, AS allows both methods:For Service Contracts, AS allows both methods: Percentage completion method; andPercentage completion method; andPercentage completion method; andPercentage completion method; and Completed Contract methodCompleted Contract methodCompleted Contract methodCompleted Contract method ICDS requires mandatorily compliance ofICDS requires mandatorily compliance ofICDS requires mandatorily compliance ofICDS requires mandatorily compliance of percentage completion method & Requirementspercentage completion method & Requirementspercentage completion method & Requirementspercentage completion method & Requirements of ICDSof ICDSof ICDSof ICDS –––– III, shall mutatis mutandis applyIII, shall mutatis mutandis applyIII, shall mutatis mutandis applyIII, shall mutatis mutandis apply However, ifHowever, ifHowever, ifHowever, if revenue from service contractsrevenue from service contractsrevenue from service contractsrevenue from service contracts isisisis duration of not more than 90duration of not more than 90duration of not more than 90duration of not more than 90 days, then revenuedays, then revenuedays, then revenuedays, then revenue may be recognized under completed contractmay be recognized under completed contractmay be recognized under completed contractmay be recognized under completed contract method. AS 9method. AS 9method. AS 9method. AS 9 –––– no such durationno such durationno such durationno such duration CA. Pramod Jain
- 54. ICDS IVICDS IVICDSIVICDS IV –––– REVENUE RECOGNITIONREVENUE RECOGNITIONREVENUE RECOGNITIONREVENUE RECOGNITION Interest income to accrue on time basisInterest income to accrue on time basisInterest income to accrue on time basisInterest income to accrue on time basis by the amountby the amountby the amountby the amount outstanding and the rate applicableoutstanding and the rate applicableoutstanding and the rate applicableoutstanding and the rate applicable . Same as. Same as. Same as. Same as ASASASAS 9999 However, as per AS 9However, as per AS 9However, as per AS 9However, as per AS 9 ---- interestinterestinterestinterest, royalties & dividends to, royalties & dividends to, royalties & dividends to, royalties & dividends to bebebebe recognizedrecognizedrecognizedrecognized when no significantwhen no significantwhen no significantwhen no significant uncertaintyuncertaintyuncertaintyuncertainty as toas toas toas to measurability or collectability existsmeasurability or collectability existsmeasurability or collectability existsmeasurability or collectability exists Judicial PronouncementsJudicial PronouncementsJudicial PronouncementsJudicial Pronouncements Right to receiveRight to receiveRight to receiveRight to receive ---- E.D. Sassoon & Co. Ltd. v. CIT (SC) (26 ITR 27)E.D. Sassoon & Co. Ltd. v. CIT (SC) (26 ITR 27)E.D. Sassoon & Co. Ltd. v. CIT (SC) (26 ITR 27)E.D. Sassoon & Co. Ltd. v. CIT (SC) (26 ITR 27) Interest income to accrue on coupon dateInterest income to accrue on coupon dateInterest income to accrue on coupon dateInterest income to accrue on coupon date ---- DIT v.DIT v.DIT v.DIT v. Credit Suisse First Boston (Cyprus) Ltd 351 ITR 323 (Credit Suisse First Boston (Cyprus) Ltd 351 ITR 323 (Credit Suisse First Boston (Cyprus) Ltd 351 ITR 323 (Credit Suisse First Boston (Cyprus) Ltd 351 ITR 323 (BomBomBomBom.).).).) InterestInterestInterestInterest on securityon securityon securityon security –––– 30/6 & 31/12.30/6 & 31/12.30/6 & 31/12.30/6 & 31/12. SellsSellsSellsSells security onsecurity onsecurity onsecurity on 30th April. Accounts interest on accrual basis till 31st30th April. Accounts interest on accrual basis till 31st30th April. Accounts interest on accrual basis till 31st30th April. Accounts interest on accrual basis till 31st March. Deduction of amount already taxed but notMarch. Deduction of amount already taxed but notMarch. Deduction of amount already taxed but notMarch. Deduction of amount already taxed but not received to be allowed as deduction. FAQreceived to be allowed as deduction. FAQreceived to be allowed as deduction. FAQreceived to be allowed as deduction. FAQ –––– Q 18Q 18Q 18Q 18 CA. Pramod Jain
- 55. ICDS IVICDS IVICDSIVICDS IV –––– REVENUE RECOGNITIONREVENUE RECOGNITIONREVENUE RECOGNITIONREVENUE RECOGNITION Reasonable certainty of ultimate collection of interestReasonable certainty of ultimate collection of interestReasonable certainty of ultimate collection of interestReasonable certainty of ultimate collection of interest & royalty not given. Recognize and if not realised claim& royalty not given. Recognize and if not realised claim& royalty not given. Recognize and if not realised claim& royalty not given. Recognize and if not realised claim bad debts u/s 36(1)(vii)bad debts u/s 36(1)(vii)bad debts u/s 36(1)(vii)bad debts u/s 36(1)(vii) . S. 43D (Banks. S. 43D (Banks. S. 43D (Banks. S. 43D (Banks,,,, PFIsPFIsPFIsPFIs etcetcetcetc)))) would prevail over ICDSwould prevail over ICDSwould prevail over ICDSwould prevail over ICDS –––– FAQFAQFAQFAQ –––– Q 13Q 13Q 13Q 13 Interest on NPAs other than Banks, PFIsInterest on NPAs other than Banks, PFIsInterest on NPAs other than Banks, PFIsInterest on NPAs other than Banks, PFIs etcetcetcetc???? Interest on Debtors, Telecom companies, ElectricityInterest on Debtors, Telecom companies, ElectricityInterest on Debtors, Telecom companies, ElectricityInterest on Debtors, Telecom companies, Electricity distribution companies, RWAs??distribution companies, RWAs??distribution companies, RWAs??distribution companies, RWAs?? ICDSICDSICDSICDS applicable on tax on gross basis on interest,applicable on tax on gross basis on interest,applicable on tax on gross basis on interest,applicable on tax on gross basis on interest, royalty & FTS for nonroyalty & FTS for nonroyalty & FTS for nonroyalty & FTS for non----residents u/s 115A. FAQresidents u/s 115A. FAQresidents u/s 115A. FAQresidents u/s 115A. FAQ –––– Q 14Q 14Q 14Q 14 InterestInterestInterestInterest on Incomeon Incomeon Incomeon Income----tax, Service Tax, etc. shall now betax, Service Tax, etc. shall now betax, Service Tax, etc. shall now betax, Service Tax, etc. shall now be taxable on receipt basis instead of accrual basis astaxable on receipt basis instead of accrual basis astaxable on receipt basis instead of accrual basis astaxable on receipt basis instead of accrual basis as contemplated under econtemplated under econtemplated under econtemplated under earlierarlierarlierarlier ICDSICDSICDSICDS CA. Pramod Jain
- 56. RECOGNIZED INCOMERECOGNIZED INCOMERECOGNIZEDINCOMERECOGNIZED INCOME –––– BADBADBADBAD DEBDTDEBDTDEBDTDEBDT What happens when income is recognised inWhat happens when income is recognised inWhat happens when income is recognised inWhat happens when income is recognised in computation but not in books as per ICDS, andcomputation but not in books as per ICDS, andcomputation but not in books as per ICDS, andcomputation but not in books as per ICDS, and later becomes bad?later becomes bad?later becomes bad?later becomes bad? S. 36(1)(S. 36(1)(S. 36(1)(S. 36(1)(vii)vii)vii)vii) ----for deduction of bad debt, the debtfor deduction of bad debt, the debtfor deduction of bad debt, the debtfor deduction of bad debt, the debt should be written of irrevocably in the books ofshould be written of irrevocably in the books ofshould be written of irrevocably in the books ofshould be written of irrevocably in the books of account??account??account??account?? S.S.S.S. 36(1) (vii36(1) (vii36(1) (vii36(1) (vii) amended by Finance Act 2015) amended by Finance Act 2015) amended by Finance Act 2015) amended by Finance Act 2015 ---- ifififif income has been offered to tax but has not beenincome has been offered to tax but has not beenincome has been offered to tax but has not beenincome has been offered to tax but has not been recognized in books of accounts, the same isrecognized in books of accounts, the same isrecognized in books of accounts, the same isrecognized in books of accounts, the same is deemed to have been recognized in the booksdeemed to have been recognized in the booksdeemed to have been recognized in the booksdeemed to have been recognized in the books for the purpose offor the purpose offor the purpose offor the purpose of s. 36(1) (viis. 36(1) (viis. 36(1) (viis. 36(1) (vii)))) CA. Pramod Jain
- 57. ICDS IVICDS IVICDSIVICDS IV –––– DISCLOSURESDISCLOSURESDISCLOSURESDISCLOSURES InInInIn a transaction involving sale of good, total amount nota transaction involving sale of good, total amount nota transaction involving sale of good, total amount nota transaction involving sale of good, total amount not recognised as revenue duringrecognised as revenue duringrecognised as revenue duringrecognised as revenue during PY duePY duePY duePY due to lack ofto lack ofto lack ofto lack of reasonably certainty of its ultimate collection along withreasonably certainty of its ultimate collection along withreasonably certainty of its ultimate collection along withreasonably certainty of its ultimate collection along with nature of uncertainty;nature of uncertainty;nature of uncertainty;nature of uncertainty; AAAAmountmountmountmount of revenue from serviceof revenue from serviceof revenue from serviceof revenue from service transactiontransactiontransactiontransaction recognisedrecognisedrecognisedrecognised as revenue during theas revenue during theas revenue during theas revenue during the PY;PY;PY;PY; MMMMethodethodethodethod used to determine the stage of completion ofused to determine the stage of completion ofused to determine the stage of completion ofused to determine the stage of completion of service transactions in progress; andservice transactions in progress; andservice transactions in progress; andservice transactions in progress; and FFFForororor service transactions in progress atservice transactions in progress atservice transactions in progress atservice transactions in progress at endendendend ofofofof PY:PY:PY:PY: AAAAmountmountmountmount of costs incurred and recognised profits (less recognised losses)of costs incurred and recognised profits (less recognised losses)of costs incurred and recognised profits (less recognised losses)of costs incurred and recognised profits (less recognised losses) uptouptouptoupto endendendend ofofofof PY;PY;PY;PY; AmountAmountAmountAmount of advances received; andof advances received; andof advances received; andof advances received; and AmountAmountAmountAmount of retentionsof retentionsof retentionsof retentions.... ASASASAS –––– none except 1none except 1none except 1none except 1stststst CA. Pramod Jain
- 58. ICDS IVICDS IVICDSIVICDS IV –––– PRACTICAL IMPLICATIONSPRACTICAL IMPLICATIONSPRACTICAL IMPLICATIONSPRACTICAL IMPLICATIONS Increased DisclosuresIncreased DisclosuresIncreased DisclosuresIncreased Disclosures Interest income on accrual basis if notInterest income on accrual basis if notInterest income on accrual basis if notInterest income on accrual basis if not recognisedrecognisedrecognisedrecognised being doubt ofbeing doubt ofbeing doubt ofbeing doubt of collection exists.collection exists.collection exists.collection exists. otherotherotherother thanthanthanthan 43D (banks,43D (banks,43D (banks,43D (banks, etcetcetcetc)))) others may have toothers may have toothers may have toothers may have to disclose adjustments in ICDSdisclose adjustments in ICDSdisclose adjustments in ICDSdisclose adjustments in ICDS If service contract beyond 90 days andIf service contract beyond 90 days andIf service contract beyond 90 days andIf service contract beyond 90 days and recognisedrecognisedrecognisedrecognised on completed contract method, needon completed contract method, needon completed contract method, needon completed contract method, need to adjust and disclosure as per ICDSto adjust and disclosure as per ICDSto adjust and disclosure as per ICDSto adjust and disclosure as per ICDS CA. Pramod Jain
- 59. FORM 3CDFORM 3CDFORM3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE –––– 13(E)13(E)13(E)13(E) ICDICDICDICD SSSS Name of ICDSName of ICDSName of ICDSName of ICDS IncreaseIncreaseIncreaseIncrease in Profitin Profitin Profitin Profit DecreaseDecreaseDecreaseDecrease in Profitin Profitin Profitin Profit NetNetNetNet ((((RsRsRsRs.).).).) DescriptionDescriptionDescriptionDescription IVIVIVIV RevenueRevenueRevenueRevenue RecognitionRecognitionRecognitionRecognition 2000200020002000 2000200020002000 • Interest notInterest notInterest notInterest not provided inprovided inprovided inprovided in books Rs.books Rs.books Rs.books Rs. 1000100010001000 • ServiceServiceServiceService contractcontractcontractcontract exceeding 90exceeding 90exceeding 90exceeding 90 daysdaysdaysdays recognisedrecognisedrecognisedrecognised onononon completedcompletedcompletedcompleted method as permethod as permethod as permethod as per AS 9AS 9AS 9AS 9 ---- 1000100010001000 TotalTotalTotalTotal 2000200020002000 CA. Pramod Jain
- 60. FORM 3CDFORM 3CDFORM3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE –––– 13(F)13(F)13(F)13(F) ICDSICDSICDSICDS Name of ICDSName of ICDSName of ICDSName of ICDS DisclosuresDisclosuresDisclosuresDisclosures IVIVIVIV Revenue RecognitionRevenue RecognitionRevenue RecognitionRevenue Recognition • Refer to the significant accountingRefer to the significant accountingRefer to the significant accountingRefer to the significant accounting policies mentioned at Note No. _ topolicies mentioned at Note No. _ topolicies mentioned at Note No. _ topolicies mentioned at Note No. _ to thethethethe Financial StatementsFinancial StatementsFinancial StatementsFinancial Statements • For aFor aFor aFor amount of revenue from servicemount of revenue from servicemount of revenue from servicemount of revenue from service transaction recognised as revenue duringtransaction recognised as revenue duringtransaction recognised as revenue duringtransaction recognised as revenue during the PY refer Note _ PLthe PY refer Note _ PLthe PY refer Note _ PLthe PY refer Note _ PL • Percentage Completion Method is beingPercentage Completion Method is beingPercentage Completion Method is beingPercentage Completion Method is being used to determine the stage ofused to determine the stage ofused to determine the stage ofused to determine the stage of completion of service transactions incompletion of service transactions incompletion of service transactions incompletion of service transactions in progress;progress;progress;progress; • For service transactions in progress atFor service transactions in progress atFor service transactions in progress atFor service transactions in progress at end of PY:end of PY:end of PY:end of PY: • Amount of costs incurred andAmount of costs incurred andAmount of costs incurred andAmount of costs incurred and recognised profits (less recognisedrecognised profits (less recognisedrecognised profits (less recognisedrecognised profits (less recognised losses)losses)losses)losses) uptouptouptoupto end of PY;end of PY;end of PY;end of PY; • Amount of advances received; andAmount of advances received; andAmount of advances received; andAmount of advances received; and • Amount of retentionsAmount of retentionsAmount of retentionsAmount of retentions.... CA. Pramod Jain
- 61. VVVV –––– TANGIBLEFIXED ASSETSTANGIBLE FIXED ASSETSTANGIBLE FIXED ASSETSTANGIBLE FIXED ASSETS CA. Pramod Jain
- 62. ICDS VICDS VICDSVICDS V –––– TANGIBLE FIXED ASSETSTANGIBLE FIXED ASSETSTANGIBLE FIXED ASSETSTANGIBLE FIXED ASSETS AS 10AS 10AS 10AS 10 ---- SSSSpare parts, standpare parts, standpare parts, standpare parts, stand----by equipment and servicingby equipment and servicingby equipment and servicingby equipment and servicing equipment are recognised in accordance with thisequipment are recognised in accordance with thisequipment are recognised in accordance with thisequipment are recognised in accordance with this Standard when they meet the definition of property,Standard when they meet the definition of property,Standard when they meet the definition of property,Standard when they meet the definition of property, plant and equipment. Otherwise, such items areplant and equipment. Otherwise, such items areplant and equipment. Otherwise, such items areplant and equipment. Otherwise, such items are classified as inventoryclassified as inventoryclassified as inventoryclassified as inventory ICDS :ICDS :ICDS :ICDS : StandStandStandStand----by equipment /servicing equipment are to beby equipment /servicing equipment are to beby equipment /servicing equipment are to beby equipment /servicing equipment are to be capitalised.capitalised.capitalised.capitalised. Machinery spares to be charged to revenue as andMachinery spares to be charged to revenue as andMachinery spares to be charged to revenue as andMachinery spares to be charged to revenue as and when consumed. When such spares can be used onlywhen consumed. When such spares can be used onlywhen consumed. When such spares can be used onlywhen consumed. When such spares can be used only in connection with an item of tangible FA & their usein connection with an item of tangible FA & their usein connection with an item of tangible FA & their usein connection with an item of tangible FA & their use is expected to be irregular, they shall be capitalisedis expected to be irregular, they shall be capitalisedis expected to be irregular, they shall be capitalisedis expected to be irregular, they shall be capitalised CA. Pramod Jain
- 63. ICDS VICDS VICDSVICDS V –––– TANGIBLE FIXED ASSETSTANGIBLE FIXED ASSETSTANGIBLE FIXED ASSETSTANGIBLE FIXED ASSETS TimeTimeTimeTime uptouptouptoupto which to be capitalized:which to be capitalized:which to be capitalized:which to be capitalized: EEEExpenditurexpenditurexpenditurexpenditure incurred on startincurred on startincurred on startincurred on start----up and commissioningup and commissioningup and commissioningup and commissioning of the project, including the expenditure incurred onof the project, including the expenditure incurred onof the project, including the expenditure incurred onof the project, including the expenditure incurred on test runs and experimental production, shall betest runs and experimental production, shall betest runs and experimental production, shall betest runs and experimental production, shall be capitalised.capitalised.capitalised.capitalised. AS 10AS 10AS 10AS 10---- Initial cost to include testing costsInitial cost to include testing costsInitial cost to include testing costsInitial cost to include testing costs EEEExpenditurexpenditurexpenditurexpenditure incurred after the plant has begunincurred after the plant has begunincurred after the plant has begunincurred after the plant has begun commercial production, that is, production intendedcommercial production, that is, production intendedcommercial production, that is, production intendedcommercial production, that is, production intended for sale or captive consumption, shall be treated asfor sale or captive consumption, shall be treated asfor sale or captive consumption, shall be treated asfor sale or captive consumption, shall be treated as revenue expenditure.revenue expenditure.revenue expenditure.revenue expenditure. Exp.Exp.Exp.Exp. incurred till plant has begun commercialincurred till plant has begun commercialincurred till plant has begun commercialincurred till plant has begun commercial production intended for sale or captiveproduction intended for sale or captiveproduction intended for sale or captiveproduction intended for sale or captive consumption to be capitalised. FAQconsumption to be capitalised. FAQconsumption to be capitalised. FAQconsumption to be capitalised. FAQ –––– Q 15Q 15Q 15Q 15 CA. Pramod Jain
- 64. ICDS VICDS VICDSVICDS V –––– DISCLOSURESDISCLOSURESDISCLOSURESDISCLOSURES –––– CLAUSE 18 FORM 3CDCLAUSE 18 FORM 3CDCLAUSE 18 FORM 3CDCLAUSE 18 FORM 3CD DescriptionDescriptionDescriptionDescription of asset or block of assets;of asset or block of assets;of asset or block of assets;of asset or block of assets; RateRateRateRate of depreciation;of depreciation;of depreciation;of depreciation; ActualActualActualActual cost orcost orcost orcost or WDV,WDV,WDV,WDV, as the case may be;as the case may be;as the case may be;as the case may be; AdditionsAdditionsAdditionsAdditions or deductions during theor deductions during theor deductions during theor deductions during the yryryryr with dates; in thewith dates; in thewith dates; in thewith dates; in the case of any addition of an asset, date put to use;case of any addition of an asset, date put to use;case of any addition of an asset, date put to use;case of any addition of an asset, date put to use; including adjustments on account ofincluding adjustments on account ofincluding adjustments on account ofincluding adjustments on account of———— CENVAT creditCENVAT creditCENVAT creditCENVAT credit claimed and allowed underclaimed and allowed underclaimed and allowed underclaimed and allowed under CENVATCENVATCENVATCENVAT CreditCreditCreditCredit Rules, 2004;Rules, 2004;Rules, 2004;Rules, 2004; ChangeChangeChangeChange in rate of exchange of currency;in rate of exchange of currency;in rate of exchange of currency;in rate of exchange of currency; SubsidySubsidySubsidySubsidy or grant or reimbursement, by whatever name called;or grant or reimbursement, by whatever name called;or grant or reimbursement, by whatever name called;or grant or reimbursement, by whatever name called; DepreciationDepreciationDepreciationDepreciation Allowable; andAllowable; andAllowable; andAllowable; and WrittenWrittenWrittenWritten down value at the end of year.down value at the end of year.down value at the end of year.down value at the end of year. CA. Pramod Jain
- 65. ICDS VICDS VICDSVICDS V –––– PRACTICAL IMPLICATIONSPRACTICAL IMPLICATIONSPRACTICAL IMPLICATIONSPRACTICAL IMPLICATIONS DisclosureDisclosureDisclosureDisclosure ---- ParaParaParaPara 18 of Form 3CD. Mention18 of Form 3CD. Mention18 of Form 3CD. Mention18 of Form 3CD. Mention same in description as well as disclosuresame in description as well as disclosuresame in description as well as disclosuresame in description as well as disclosure If cost varies due to borrowing costs, what toIf cost varies due to borrowing costs, what toIf cost varies due to borrowing costs, what toIf cost varies due to borrowing costs, what to do…? No specific column in Para 18. Additiondo…? No specific column in Para 18. Additiondo…? No specific column in Para 18. Additiondo…? No specific column in Para 18. Addition would tally with FS too?would tally with FS too?would tally with FS too?would tally with FS too? Add in actual cost in Para 18 and give details in additionsAdd in actual cost in Para 18 and give details in additionsAdd in actual cost in Para 18 and give details in additionsAdd in actual cost in Para 18 and give details in additions Would Depreciation adjustment for companiesWould Depreciation adjustment for companiesWould Depreciation adjustment for companiesWould Depreciation adjustment for companies etcetcetcetc to be disclosed in ICDS?to be disclosed in ICDS?to be disclosed in ICDS?to be disclosed in ICDS? Would gain / loss on sale of asset be disclosedWould gain / loss on sale of asset be disclosedWould gain / loss on sale of asset be disclosedWould gain / loss on sale of asset be disclosed in ICDS?in ICDS?in ICDS?in ICDS? Machinery Spares / Stand byMachinery Spares / Stand byMachinery Spares / Stand byMachinery Spares / Stand by equipmentsequipmentsequipmentsequipments,,,, etcetcetcetc CA. Pramod Jain
- 66. FORM 3CDFORM 3CDFORM3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE –––– 13(E)13(E)13(E)13(E) ICDICDICDICD SSSS Name of ICDSName of ICDSName of ICDSName of ICDS IncreaseIncreaseIncreaseIncrease in Profitin Profitin Profitin Profit DecreaseDecreaseDecreaseDecrease in Profitin Profitin Profitin Profit Net (Net (Net (Net (RsRsRsRs.).).).) DescriptionDescriptionDescriptionDescription VVVV Tangible FixedTangible FixedTangible FixedTangible Fixed AssetsAssetsAssetsAssets 20000200002000020000 30000300003000030000 ----10000100001000010000 • DepreciationDepreciationDepreciationDepreciation effect oneffect oneffect oneffect on taking it astaking it astaking it astaking it as per IT Actper IT Actper IT Actper IT Act –––– Co. ActCo. ActCo. ActCo. Act 20000; IT20000; IT20000; IT20000; IT Act 25000Act 25000Act 25000Act 25000 • Loss on saleLoss on saleLoss on saleLoss on sale of assetsof assetsof assetsof assets 5000500050005000 takentakentakentaken on block ofon block ofon block ofon block of assetassetassetasset methodmethodmethodmethod TotalTotalTotalTotal ----10000100001000010000 CA. Pramod Jain
- 67. FORM 3CDFORM 3CDFORM3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE –––– 13(F)13(F)13(F)13(F) ICDSICDSICDSICDS Name of ICDSName of ICDSName of ICDSName of ICDS DisclosuresDisclosuresDisclosuresDisclosures VVVV Tangible FixedTangible FixedTangible FixedTangible Fixed AssetsAssetsAssetsAssets • Refer to the clauseRefer to the clauseRefer to the clauseRefer to the clause 18 of Form 3CD18 of Form 3CD18 of Form 3CD18 of Form 3CD CA. Pramod Jain
- 68. VIVIVIVI EFFECTS OF CHANGESIN FOREIGN EXCHANGEEFFECTS OF CHANGES IN FOREIGN EXCHANGEEFFECTS OF CHANGES IN FOREIGN EXCHANGEEFFECTS OF CHANGES IN FOREIGN EXCHANGE RATESRATESRATESRATES CA. Pramod Jain
- 69. ICDS VIICDS VIICDSVIICDS VI –––– EFFECTS OF CHANGES IN FOREIGN EXCHANGEEFFECTS OF CHANGES IN FOREIGN EXCHANGEEFFECTS OF CHANGES IN FOREIGN EXCHANGEEFFECTS OF CHANGES IN FOREIGN EXCHANGE RATESRATESRATESRATES CA. Pramod Jain Foreign Currency TransactionsForeign Currency TransactionsForeign Currency TransactionsForeign Currency Transactions Foreign OperationsForeign OperationsForeign OperationsForeign Operations Forward Exchange ContractsForward Exchange ContractsForward Exchange ContractsForward Exchange Contracts
- 70. ICDS VIICDS VIICDSVIICDS VI –––– EFFECTS OF CHANGES IN FOREIGN EXCHANGEEFFECTS OF CHANGES IN FOREIGN EXCHANGEEFFECTS OF CHANGES IN FOREIGN EXCHANGEEFFECTS OF CHANGES IN FOREIGN EXCHANGE RATESRATESRATESRATES Initial RecognitionInitial RecognitionInitial RecognitionInitial Recognition TTTToooo be recorded in reporting currency bybe recorded in reporting currency bybe recorded in reporting currency bybe recorded in reporting currency by applying exchange rate of the foreign currencyapplying exchange rate of the foreign currencyapplying exchange rate of the foreign currencyapplying exchange rate of the foreign currency at the date of the transactionat the date of the transactionat the date of the transactionat the date of the transaction Conversion on last date of previous yearConversion on last date of previous yearConversion on last date of previous yearConversion on last date of previous year Recognition of exchange differences has to beRecognition of exchange differences has to beRecognition of exchange differences has to beRecognition of exchange differences has to be subject to s. 43A or Rulesubject to s. 43A or Rulesubject to s. 43A or Rulesubject to s. 43A or Rule 115115115115 ICDSICDSICDSICDS scope does not excludescope does not excludescope does not excludescope does not exclude exchangeexchangeexchangeexchange differences arising from foreign currencydifferences arising from foreign currencydifferences arising from foreign currencydifferences arising from foreign currency borrowings to the extent considered as anborrowings to the extent considered as anborrowings to the extent considered as anborrowings to the extent considered as an adjustment to interest costsadjustment to interest costsadjustment to interest costsadjustment to interest costs.... CA. Pramod Jain
- 71. ICDS VIICDS VIICDSVIICDS VI –––– CONVERSION AT LAST DATE OFCONVERSION AT LAST DATE OFCONVERSION AT LAST DATE OFCONVERSION AT LAST DATE OF PYPYPYPY Monetary itemsMonetary itemsMonetary itemsMonetary items TTTToooo be converted by applyingbe converted by applyingbe converted by applyingbe converted by applying closingclosingclosingclosing raterateraterate ExchangeExchangeExchangeExchange differences arising ondifferences arising ondifferences arising ondifferences arising on settlement orsettlement orsettlement orsettlement or onononon conversionconversionconversionconversion shallshallshallshall be recognised as income/expensebe recognised as income/expensebe recognised as income/expensebe recognised as income/expense NonNonNonNon----monetary itemsmonetary itemsmonetary itemsmonetary items Item which are carried at historical cost to beItem which are carried at historical cost to beItem which are carried at historical cost to beItem which are carried at historical cost to be converted by applying rate at the date of transactionconverted by applying rate at the date of transactionconverted by applying rate at the date of transactionconverted by applying rate at the date of transaction ExchangeExchangeExchangeExchange differences arising on conversiondifferences arising on conversiondifferences arising on conversiondifferences arising on conversion shallshallshallshall notnotnotnot be recognised as incomebe recognised as incomebe recognised as incomebe recognised as income /expense/expense/expense/expense in that PY.in that PY.in that PY.in that PY. NonNonNonNon----monetarymonetarymonetarymonetary items being inventory carried at fairitems being inventory carried at fairitems being inventory carried at fairitems being inventory carried at fair value shall be converted at rate prevailing on datevalue shall be converted at rate prevailing on datevalue shall be converted at rate prevailing on datevalue shall be converted at rate prevailing on date when such NRV iswhen such NRV iswhen such NRV iswhen such NRV is determineddetermineddetermineddetermined CA. Pramod Jain
- 72. ICDS VIICDS VIICDSVIICDS VI –––– FOREIGN OPERATIONSFOREIGN OPERATIONSFOREIGN OPERATIONSFOREIGN OPERATIONS DoesDoesDoesDoes not differentiate between integral and nonnot differentiate between integral and nonnot differentiate between integral and nonnot differentiate between integral and non---- integral operationsintegral operationsintegral operationsintegral operations.... Same translatingSame translatingSame translatingSame translating provisions.provisions.provisions.provisions. FS of a foreign operation shall be translated usingFS of a foreign operation shall be translated usingFS of a foreign operation shall be translated usingFS of a foreign operation shall be translated using the principles and procedures in paras 3 to 6 as ifthe principles and procedures in paras 3 to 6 as ifthe principles and procedures in paras 3 to 6 as ifthe principles and procedures in paras 3 to 6 as if the transactions of the foreign operation had beenthe transactions of the foreign operation had beenthe transactions of the foreign operation had beenthe transactions of the foreign operation had been those of the personthose of the personthose of the personthose of the person himselfhimselfhimselfhimself ASASASAS ---- separate provisions for nonseparate provisions for nonseparate provisions for nonseparate provisions for non----integral.integral.integral.integral. Exchange difference on monetary items formingExchange difference on monetary items formingExchange difference on monetary items formingExchange difference on monetary items forming part of enterprise net investment in nonpart of enterprise net investment in nonpart of enterprise net investment in nonpart of enterprise net investment in non----integralintegralintegralintegral operations to be transferred to FCTRoperations to be transferred to FCTRoperations to be transferred to FCTRoperations to be transferred to FCTR CA. Pramod Jain
- 73. ICDS VIICDS VIICDSVIICDS VI –––– FORWARD EXCHANGE CONTRACTSFORWARD EXCHANGE CONTRACTSFORWARD EXCHANGE CONTRACTSFORWARD EXCHANGE CONTRACTS AnyAnyAnyAny premium or discount arising atpremium or discount arising atpremium or discount arising atpremium or discount arising at inceptioninceptioninceptioninception of a forward exchange contractof a forward exchange contractof a forward exchange contractof a forward exchange contract shall be amortised as expense or incomeshall be amortised as expense or incomeshall be amortised as expense or incomeshall be amortised as expense or income over the lifeover the lifeover the lifeover the life of contract. Provided:of contract. Provided:of contract. Provided:of contract. Provided: is not intended for trading or speculationis not intended for trading or speculationis not intended for trading or speculationis not intended for trading or speculation purposes; andpurposes; andpurposes; andpurposes; and is entered into to establish the amount of theis entered into to establish the amount of theis entered into to establish the amount of theis entered into to establish the amount of the reporting currency required or available at thereporting currency required or available at thereporting currency required or available at thereporting currency required or available at the settlement date of the transactionsettlement date of the transactionsettlement date of the transactionsettlement date of the transaction CA. Pramod Jain
- 74. ICDS VIICDS VIICDSVIICDS VI –––– FORWARD EXCHANGE CONTRACTSFORWARD EXCHANGE CONTRACTSFORWARD EXCHANGE CONTRACTSFORWARD EXCHANGE CONTRACTS PremiumPremiumPremiumPremium, discount or exchange difference on, discount or exchange difference on, discount or exchange difference on, discount or exchange difference on contracts thatcontracts thatcontracts thatcontracts that areareareare intendedintendedintendedintended forforforfor trading ortrading ortrading ortrading or speculation purposes, orspeculation purposes, orspeculation purposes, orspeculation purposes, or thatthatthatthat are entered into to hedgeare entered into to hedgeare entered into to hedgeare entered into to hedge foreignforeignforeignforeign currency riskcurrency riskcurrency riskcurrency risk ofofofof aaaa firm commitmentfirm commitmentfirm commitmentfirm commitment (not including assets(not including assets(not including assets(not including assets and liabilitiesand liabilitiesand liabilitiesand liabilities existing at the end of the previous yearexisting at the end of the previous yearexisting at the end of the previous yearexisting at the end of the previous year ) or) or) or) or aaaa highly probable forecast transactionhighly probable forecast transactionhighly probable forecast transactionhighly probable forecast transaction totototo be recognised atbe recognised atbe recognised atbe recognised at timetimetimetime ofofofof settlement. ASsettlement. ASsettlement. ASsettlement. AS –––– provideprovideprovideprovide for Mark to marketfor Mark to marketfor Mark to marketfor Mark to market CA. Pramod Jain
- 75. ICDS VIICDS VIICDSVIICDS VI –––– DISCLOSURESDISCLOSURESDISCLOSURESDISCLOSURES ICDSICDSICDSICDS –––– NoneNoneNoneNone ASASASAS –––– A fewA fewA fewA few CA. Pramod Jain
- 76. ICDS VIICDS VIICDSVIICDS VI –––– PRACTICAL IMPLICATIONPRACTICAL IMPLICATIONPRACTICAL IMPLICATIONPRACTICAL IMPLICATION Difference in translation of nonDifference in translation of nonDifference in translation of nonDifference in translation of non----integralintegralintegralintegral operations, if anyoperations, if anyoperations, if anyoperations, if any Foreign Currency Translation ReserveForeign Currency Translation ReserveForeign Currency Translation ReserveForeign Currency Translation Reserve (FCTR) balance as on 1.4.2016 pertaining(FCTR) balance as on 1.4.2016 pertaining(FCTR) balance as on 1.4.2016 pertaining(FCTR) balance as on 1.4.2016 pertaining to exchange differences monetary itemsto exchange differences monetary itemsto exchange differences monetary itemsto exchange differences monetary items for nonfor nonfor nonfor non----integral operations to beintegral operations to beintegral operations to beintegral operations to be recognized to the extent not recognized inrecognized to the extent not recognized inrecognized to the extent not recognized inrecognized to the extent not recognized in income computation inincome computation inincome computation inincome computation in pastpastpastpast Would 43A implications be disclosed inWould 43A implications be disclosed inWould 43A implications be disclosed inWould 43A implications be disclosed in ICDS now?ICDS now?ICDS now?ICDS now? CA. Pramod Jain
- 77. FORM 3CDFORM 3CDFORM3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE –––– 13(E)13(E)13(E)13(E) ICDICDICDICD SSSS Name of ICDSName of ICDSName of ICDSName of ICDS IncreaseIncreaseIncreaseIncrease in Profitin Profitin Profitin Profit DecreaseDecreaseDecreaseDecrease in Profitin Profitin Profitin Profit Net (Net (Net (Net (RsRsRsRs.).).).) DescriptionDescriptionDescriptionDescription VIVIVIVI Effect ofEffect ofEffect ofEffect of Changes inChanges inChanges inChanges in ForeignForeignForeignForeign ExchangeExchangeExchangeExchange RatesRatesRatesRates 2500250025002500 5000500050005000 ----2500250025002500 • FCTR of nonFCTR of nonFCTR of nonFCTR of non---- IntegralIntegralIntegralIntegral OperationsOperationsOperationsOperations ---- 2000200020002000 • Foreign ExchangeForeign ExchangeForeign ExchangeForeign Exchange Fluctuation lossFluctuation lossFluctuation lossFluctuation loss on borrowingon borrowingon borrowingon borrowing costs as per AScosts as per AScosts as per AScosts as per AS 16161616 –––– 5000500050005000 • Mark to marketMark to marketMark to marketMark to market loss on FECloss on FECloss on FECloss on FEC –––– 500500500500 TotalTotalTotalTotal ----2500250025002500 CA. Pramod Jain
- 78. VIIVIIVIIVII –––– GOVERNMENTGRANTSGOVERNMENT GRANTSGOVERNMENT GRANTSGOVERNMENT GRANTS CA. Pramod Jain
- 79. ICDS VIIICDS VIIICDSVIIICDS VII –––– GOVERNMENT GRANTSGOVERNMENT GRANTSGOVERNMENT GRANTSGOVERNMENT GRANTS ASASASAS ----12 permits two approaches, depending on12 permits two approaches, depending on12 permits two approaches, depending on12 permits two approaches, depending on the nature of the grant:the nature of the grant:the nature of the grant:the nature of the grant: Capital approachCapital approachCapital approachCapital approach –––– owner’s fundsowner’s fundsowner’s fundsowner’s funds Income approachIncome approachIncome approachIncome approach ICDSICDSICDSICDS –––– only income approachonly income approachonly income approachonly income approach Recognition Criteria:Recognition Criteria:Recognition Criteria:Recognition Criteria: Not be recognised until there is reasonableNot be recognised until there is reasonableNot be recognised until there is reasonableNot be recognised until there is reasonable assurance thatassurance thatassurance thatassurance that Person shall comply with conditions attached to them; &Person shall comply with conditions attached to them; &Person shall comply with conditions attached to them; &Person shall comply with conditions attached to them; & Grants shall be receivedGrants shall be receivedGrants shall be receivedGrants shall be received Not to be postponed beyond actual date of receiptNot to be postponed beyond actual date of receiptNot to be postponed beyond actual date of receiptNot to be postponed beyond actual date of receipt.... CA. Pramod Jain
- 80. ICDS VIIICDS VIIICDSVIIICDS VII –––– GOVERNMENT GRANTSGOVERNMENT GRANTSGOVERNMENT GRANTSGOVERNMENT GRANTS ASASASAS----12121212 –––– To be recognised on satisfaction ofTo be recognised on satisfaction ofTo be recognised on satisfaction ofTo be recognised on satisfaction of related conditions & achieving reasonablerelated conditions & achieving reasonablerelated conditions & achieving reasonablerelated conditions & achieving reasonable certainty of receipt.certainty of receipt.certainty of receipt.certainty of receipt. ASASASAS ----12121212 ---- GovernmentGovernmentGovernmentGovernment grant with respect togrant with respect togrant with respect togrant with respect to depreciable FAdepreciable FAdepreciable FAdepreciable FA maymaymaymay be either reducedbe either reducedbe either reducedbe either reduced fromfromfromfrom gross block or may be transferred togross block or may be transferred togross block or may be transferred togross block or may be transferred to PL inPL inPL inPL in proportion..proportion..proportion..proportion.. ICDSICDSICDSICDS ---- Government grant with respect toGovernment grant with respect toGovernment grant with respect toGovernment grant with respect to depreciable fixed asset always required to bedepreciable fixed asset always required to bedepreciable fixed asset always required to bedepreciable fixed asset always required to be reduced from the actual cost of depreciablereduced from the actual cost of depreciablereduced from the actual cost of depreciablereduced from the actual cost of depreciable fixed assetsfixed assetsfixed assetsfixed assets.... CA. Pramod Jain
- 81. ICDS VIIICDS VIIICDSVIIICDS VII –––– GOVERNMENT GRANTSGOVERNMENT GRANTSGOVERNMENT GRANTSGOVERNMENT GRANTS AS 12AS 12AS 12AS 12 ---- GovernmentGovernmentGovernmentGovernment grants in respect of nongrants in respect of nongrants in respect of nongrants in respect of non depreciable fixed assetsdepreciable fixed assetsdepreciable fixed assetsdepreciable fixed assets areareareare required to berequired to berequired to berequired to be credited to the capital reserve account wherecredited to the capital reserve account wherecredited to the capital reserve account wherecredited to the capital reserve account where there is no obligation to be fulfilled. Howeverthere is no obligation to be fulfilled. Howeverthere is no obligation to be fulfilled. Howeverthere is no obligation to be fulfilled. However ICDS is silent over this &ICDS is silent over this &ICDS is silent over this &ICDS is silent over this & requires to berequires to berequires to berequires to be recognized as income over the period over whichrecognized as income over the period over whichrecognized as income over the period over whichrecognized as income over the period over which cost of meeting such obligation iscost of meeting such obligation iscost of meeting such obligation iscost of meeting such obligation is chargedchargedchargedcharged ICDS have annulledICDS have annulledICDS have annulledICDS have annulled ‘The Purpose‘The Purpose‘The Purpose‘The Purpose RRRRule’ule’ule’ule’ that wasthat wasthat wasthat was established by several Case laws pronouncedestablished by several Case laws pronouncedestablished by several Case laws pronouncedestablished by several Case laws pronounced likelikelikelike RasoiRasoiRasoiRasoi Ltd. Now even the subsidy is forLtd. Now even the subsidy is forLtd. Now even the subsidy is forLtd. Now even the subsidy is for capital purpose the same is exposed tocapital purpose the same is exposed tocapital purpose the same is exposed tocapital purpose the same is exposed to taxabilitytaxabilitytaxabilitytaxability. CA. Pramod Jain
- 82. ICDS VIIICDS VIIICDSVIIICDS VII –––– IT ACTIT ACTIT ACTIT ACT Inserted by Finance Act 2015Inserted by Finance Act 2015Inserted by Finance Act 2015Inserted by Finance Act 2015 ---- S. 2(24)S. 2(24)S. 2(24)S. 2(24) (xviii)(xviii)(xviii)(xviii) ---- AssistanceAssistanceAssistanceAssistance in the form of a subsidy or grant or cashin the form of a subsidy or grant or cashin the form of a subsidy or grant or cashin the form of a subsidy or grant or cash incentive or duty drawback or waiver or concession orincentive or duty drawback or waiver or concession orincentive or duty drawback or waiver or concession orincentive or duty drawback or waiver or concession or reimbursement (by whatever name called) by the CG orreimbursement (by whatever name called) by the CG orreimbursement (by whatever name called) by the CG orreimbursement (by whatever name called) by the CG or a SG or any authority or body or agency in cash or kinda SG or any authority or body or agency in cash or kinda SG or any authority or body or agency in cash or kinda SG or any authority or body or agency in cash or kind to theto theto theto the assesseeassesseeassesseeassessee other than,other than,other than,other than,———— SubsidySubsidySubsidySubsidy or grant or reimbursement which is takenor grant or reimbursement which is takenor grant or reimbursement which is takenor grant or reimbursement which is taken into account for determinationinto account for determinationinto account for determinationinto account for determination ofofofof actual cost of theactual cost of theactual cost of theactual cost of the asset in accordance with the provisions ofasset in accordance with the provisions ofasset in accordance with the provisions ofasset in accordance with the provisions of Explanation 10 to clause (1) of section 43; orExplanation 10 to clause (1) of section 43; orExplanation 10 to clause (1) of section 43; orExplanation 10 to clause (1) of section 43; or Inst. By Finance Act 2016Inst. By Finance Act 2016Inst. By Finance Act 2016Inst. By Finance Act 2016 ---- SubsidySubsidySubsidySubsidy or grant byor grant byor grant byor grant by CGCGCGCG for the purpose of the corpus of a trust or institutionfor the purpose of the corpus of a trust or institutionfor the purpose of the corpus of a trust or institutionfor the purpose of the corpus of a trust or institution established by theestablished by theestablished by theestablished by the CGCGCGCG or aor aor aor a SG,SG,SG,SG, as the case may beas the case may beas the case may beas the case may be CA. Pramod Jain
- 83. ICDS VIIICDS VIIICDSVIIICDS VII –––– IT ACTIT ACTIT ACTIT ACT Explanation 10 to 43(1)Explanation 10 to 43(1)Explanation 10 to 43(1)Explanation 10 to 43(1) ---- Where a portion of the cost ofWhere a portion of the cost ofWhere a portion of the cost ofWhere a portion of the cost of an asset acquired by thean asset acquired by thean asset acquired by thean asset acquired by the assesseeassesseeassesseeassessee has been methas been methas been methas been met directly or indirectly by the CG or SG or any authoritydirectly or indirectly by the CG or SG or any authoritydirectly or indirectly by the CG or SG or any authoritydirectly or indirectly by the CG or SG or any authority established under any law or by any other person, inestablished under any law or by any other person, inestablished under any law or by any other person, inestablished under any law or by any other person, in the form of a subsidy or grant or reimbursement (bythe form of a subsidy or grant or reimbursement (bythe form of a subsidy or grant or reimbursement (bythe form of a subsidy or grant or reimbursement (by whatever name called), then, so much of the cost as iswhatever name called), then, so much of the cost as iswhatever name called), then, so much of the cost as iswhatever name called), then, so much of the cost as is relatable to such subsidy or grant or reimbursementrelatable to such subsidy or grant or reimbursementrelatable to such subsidy or grant or reimbursementrelatable to such subsidy or grant or reimbursement shall not be included inshall not be included inshall not be included inshall not be included in actualactualactualactual costcostcostcost of the asset to theof the asset to theof the asset to theof the asset to the assesseeassesseeassesseeassessee:::: CA. Pramod Jain
- 84. ICDS VIIICDS VIIICDSVIIICDS VII –––– IT ACTIT ACTIT ACTIT ACT Explanation 10 to 43(1)Explanation 10 to 43(1)Explanation 10 to 43(1)Explanation 10 to 43(1) ---- Provided that where such subsidy or grant orProvided that where such subsidy or grant orProvided that where such subsidy or grant orProvided that where such subsidy or grant or reimbursement is of such nature that it cannot bereimbursement is of such nature that it cannot bereimbursement is of such nature that it cannot bereimbursement is of such nature that it cannot be directly relatable to the asset acquired, so much of thedirectly relatable to the asset acquired, so much of thedirectly relatable to the asset acquired, so much of thedirectly relatable to the asset acquired, so much of the amount which bears to the total subsidy oramount which bears to the total subsidy oramount which bears to the total subsidy oramount which bears to the total subsidy or reimbursement or grant the same proportion as suchreimbursement or grant the same proportion as suchreimbursement or grant the same proportion as suchreimbursement or grant the same proportion as such asset bears to all the assets in respect of or withasset bears to all the assets in respect of or withasset bears to all the assets in respect of or withasset bears to all the assets in respect of or with reference to which the subsidy or grant orreference to which the subsidy or grant orreference to which the subsidy or grant orreference to which the subsidy or grant or reimbursement is so received, shall not be included inreimbursement is so received, shall not be included inreimbursement is so received, shall not be included inreimbursement is so received, shall not be included in the actual cost of the asset to thethe actual cost of the asset to thethe actual cost of the asset to thethe actual cost of the asset to the assesseeassesseeassesseeassessee.... Also to see s. 28Also to see s. 28Also to see s. 28Also to see s. 28 CA. Pramod Jain
- 85. ICDS VIIICDS VIIICDSVIIICDS VII –––– DISCLOSUREDISCLOSUREDISCLOSUREDISCLOSURE NatureNatureNatureNature and extent of Government grantsand extent of Government grantsand extent of Government grantsand extent of Government grants recognised during PY:recognised during PY:recognised during PY:recognised during PY: ByByByBy way of deduction from actual cost of the asset orway of deduction from actual cost of the asset orway of deduction from actual cost of the asset orway of deduction from actual cost of the asset or assets or from the WDV of block of assets during theassets or from the WDV of block of assets during theassets or from the WDV of block of assets during theassets or from the WDV of block of assets during the PY;PY;PY;PY; AsAsAsAs income;income;income;income; ByByByBy way of deduction from actual cost of asset(s) orway of deduction from actual cost of asset(s) orway of deduction from actual cost of asset(s) orway of deduction from actual cost of asset(s) or from WDV of block of assets and reasons thereof;from WDV of block of assets and reasons thereof;from WDV of block of assets and reasons thereof;from WDV of block of assets and reasons thereof; NotNotNotNot recognised during the PY as income and reasonsrecognised during the PY as income and reasonsrecognised during the PY as income and reasonsrecognised during the PY as income and reasons thereof.thereof.thereof.thereof. ASASASAS –––– totally differenttotally differenttotally differenttotally different CA. Pramod Jain
- 86. ICDS VIIICDS VIIICDSVIIICDS VII –––– PRACTICAL IMPLICATIONPRACTICAL IMPLICATIONPRACTICAL IMPLICATIONPRACTICAL IMPLICATION Disclosures requiredDisclosures requiredDisclosures requiredDisclosures required If transferred to owner’s fundIf transferred to owner’s fundIf transferred to owner’s fundIf transferred to owner’s fund –––– adjustmentadjustmentadjustmentadjustment required and disclosure in ICDSrequired and disclosure in ICDSrequired and disclosure in ICDSrequired and disclosure in ICDS If grant for depreciable assets charged toIf grant for depreciable assets charged toIf grant for depreciable assets charged toIf grant for depreciable assets charged to revenue in proportion.. Disclosure as per ICDSrevenue in proportion.. Disclosure as per ICDSrevenue in proportion.. Disclosure as per ICDSrevenue in proportion.. Disclosure as per ICDS –––– reduce from FAreduce from FAreduce from FAreduce from FA If grant for nonIf grant for nonIf grant for nonIf grant for non----depreciable assets transferred todepreciable assets transferred todepreciable assets transferred todepreciable assets transferred to capital reserve.. Disclosure as per ICDScapital reserve.. Disclosure as per ICDScapital reserve.. Disclosure as per ICDScapital reserve.. Disclosure as per ICDS –––– chargechargechargecharge to revenueto revenueto revenueto revenue If complying as per IT Act, no other implicationIf complying as per IT Act, no other implicationIf complying as per IT Act, no other implicationIf complying as per IT Act, no other implication CA. Pramod Jain
- 87. FORM 3CDFORM 3CDFORM3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE –––– 13(E)13(E)13(E)13(E) ICDICDICDICD SSSS Name of ICDSName of ICDSName of ICDSName of ICDS Increase inIncrease inIncrease inIncrease in ProfitProfitProfitProfit DecreaseDecreaseDecreaseDecrease in Profitin Profitin Profitin Profit Net (Net (Net (Net (RsRsRsRs.).).).) DescriptionDescriptionDescriptionDescription VIIVIIVIIVII GovernmentGovernmentGovernmentGovernment GrantsGrantsGrantsGrants 2000200020002000 3000300030003000 ----1000100010001000 • GrantGrantGrantGrant recogniserecogniserecogniserecognise dddd asasasas CapitalCapitalCapitalCapital ReserveReserveReserveReserve ---- 2000200020002000 • Grant onGrant onGrant onGrant on FAFAFAFA recogniserecogniserecogniserecognise dddd asasasas revenuerevenuerevenuerevenue as per ASas per ASas per ASas per AS 12121212 ---- 3000300030003000 TotalTotalTotalTotal ----1000100010001000 CA. Pramod Jain
- 88. FORM 3CDFORM 3CDFORM3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE –––– 13(F)13(F)13(F)13(F) ICDSICDSICDSICDS Name of ICDSName of ICDSName of ICDSName of ICDS DisclosuresDisclosuresDisclosuresDisclosures VIIVIIVIIVII Government GrantsGovernment GrantsGovernment GrantsGovernment Grants Nature and extent of GovernmentNature and extent of GovernmentNature and extent of GovernmentNature and extent of Government grants recognised during PY:grants recognised during PY:grants recognised during PY:grants recognised during PY: By way of deduction fromBy way of deduction fromBy way of deduction fromBy way of deduction from actual cost of the asset oractual cost of the asset oractual cost of the asset oractual cost of the asset or assets or from the WDV ofassets or from the WDV ofassets or from the WDV ofassets or from the WDV of block of assets during the PY;block of assets during the PY;block of assets during the PY;block of assets during the PY; As income;As income;As income;As income; By way of deduction fromBy way of deduction fromBy way of deduction fromBy way of deduction from actual cost of asset(s) or fromactual cost of asset(s) or fromactual cost of asset(s) or fromactual cost of asset(s) or from WDV of block of assets andWDV of block of assets andWDV of block of assets andWDV of block of assets and reasons thereof;reasons thereof;reasons thereof;reasons thereof; Not recognised during the PYNot recognised during the PYNot recognised during the PYNot recognised during the PY as income and reasonsas income and reasonsas income and reasonsas income and reasons thereofthereofthereofthereof.... CA. Pramod Jain
- 89.
- 90. ICDSICDSICDSICDS VIIIVIIIVIIIVIII ––––SECURITIESSECURITIESSECURITIESSECURITIES Comparison to be done categoryComparison to be done categoryComparison to be done categoryComparison to be done category----wise and notwise and notwise and notwise and not each security wiseeach security wiseeach security wiseeach security wise To beTo beTo beTo be classified into the followingclassified into the followingclassified into the followingclassified into the following categories:categories:categories:categories:---- SharesSharesSharesShares;;;; DDDDebtebtebtebt securities;securities;securities;securities; CCCConvertibleonvertibleonvertibleonvertible securities;securities;securities;securities; &&&& AAAAnynynyny other securities not covered above.other securities not covered above.other securities not covered above.other securities not covered above. Opening stockOpening stockOpening stockOpening stock----inininin----trade to betrade to betrade to betrade to be:::: CCCCostostostost of securitiesof securitiesof securitiesof securities ,,,, if any, onif any, onif any, onif any, on commencementcommencementcommencementcommencement ofofofof businessbusinessbusinessbusiness ifififif commenced duringcommenced duringcommenced duringcommenced during PY;PY;PY;PY; andandandand VVVValue ofalue ofalue ofalue of securitiessecuritiessecuritiessecurities on closeon closeon closeon close ofofofof immediatelyimmediatelyimmediatelyimmediately precedingprecedingprecedingpreceding PY,PY,PY,PY, inininin otherotherotherother case.case.case.case. CA. Pramod Jain
- 91. ICDSICDSICDSICDS VIIIVIIIVIIIVIII ––––BUCKET METHODBUCKET METHODBUCKET METHODBUCKET METHOD SecuritySecuritySecuritySecurity CategoryCategoryCategoryCategory CostCostCostCost NRVNRVNRVNRV Lower ofLower ofLower ofLower of Cost or NRVCost or NRVCost or NRVCost or NRV ICDSICDSICDSICDS ValueValueValueValue 1111 Share AShare AShare AShare A 1000100010001000 750750750750 750750750750 2222 Share BShare BShare BShare B 1200120012001200 1500150015001500 1200120012001200 3333 Share CShare CShare CShare C 1400140014001400 1200120012001200 1200120012001200 4444 Share DShare DShare DShare D 2000200020002000 1900190019001900 1900190019001900 TotalTotalTotalTotal 5600560056005600 5350535053505350 5050505050505050 5350535053505350 5555 Deb.Deb.Deb.Deb. EEEE 1500150015001500 1600160016001600 1500150015001500 6666 Deb. FDeb. FDeb. FDeb. F 1050105010501050 900900900900 900900900900 7777 Deb. GDeb. GDeb. GDeb. G 1250125012501250 1350135013501350 1250125012501250 8888 Deb HDeb HDeb HDeb H 2200220022002200 2300230023002300 2200220022002200 TotalTotalTotalTotal 6000600060006000 6150615061506150 5850585058505850 6000600060006000 TotalTotalTotalTotal 11600116001160011600 11500115001150011500 10900109001090010900 11350113501135011350 CA. Pramod Jain
- 92. ICDSICDSICDSICDS VIIIVIIIVIIIVIII ––––BUCKET METHODBUCKET METHODBUCKET METHODBUCKET METHOD SecuritySecuritySecuritySecurity CostCostCostCost NRVNRVNRVNRV Lower ofLower ofLower ofLower of Cost or NRVCost or NRVCost or NRVCost or NRV ICDSICDSICDSICDS ValueValueValueValue 1111 1000100010001000 20202020 20202020 2222 1000100010001000 100100100100 100100100100 3333 1000100010001000 100100100100 100100100100 4444 1000100010001000 200200200200 200200200200 5555 1000100010001000 200200200200 200200200200 6666 1000100010001000 5000500050005000 1000100010001000 TotalTotalTotalTotal 6000600060006000 5620562056205620 1620162016201620 5620562056205620 CA. Pramod Jain
- 93. ICDSICDSICDSICDS VIIIVIIIVIIIVIII ––––BUCKET METHODBUCKET METHODBUCKET METHODBUCKET METHOD SecuritySecuritySecuritySecurity CostCostCostCost NRVNRVNRVNRV Lower ofLower ofLower ofLower of Cost or NRVCost or NRVCost or NRVCost or NRV ICDSICDSICDSICDS ValueValueValueValue YEAR 1YEAR 1YEAR 1YEAR 1 1111 1000100010001000 500500500500 500500500500 2222 1000100010001000 100100100100 100100100100 3333 3000300030003000 3500350035003500 3000300030003000 TotalTotalTotalTotal 5000500050005000 4100410041004100 3600360036003600 4100410041004100 YEAR 2YEAR 2YEAR 2YEAR 2 1111 1000100010001000 2000200020002000 1000100010001000 2222 1000100010001000 500500500500 500500500500 3333 3000300030003000 4000400040004000 3000300030003000 TotalTotalTotalTotal 5000500050005000 6500650065006500 4500450045004500 5000500050005000 CA. Pramod Jain
- 94. ICDSICDSICDSICDS VIIIVIIIVIIIVIII ––––PRACTICAL IMPLICATIONPRACTICAL IMPLICATIONPRACTICAL IMPLICATIONPRACTICAL IMPLICATION No DisclosuresNo DisclosuresNo DisclosuresNo Disclosures One can value its inventories of securities inOne can value its inventories of securities inOne can value its inventories of securities inOne can value its inventories of securities in books of accounts as per Bucket method as nobooks of accounts as per Bucket method as nobooks of accounts as per Bucket method as nobooks of accounts as per Bucket method as no specific AS on same. Consequently no ICDSspecific AS on same. Consequently no ICDSspecific AS on same. Consequently no ICDSspecific AS on same. Consequently no ICDS adjustment thereof.adjustment thereof.adjustment thereof.adjustment thereof. CA. Pramod Jain
- 95. FORM 3CDFORM 3CDFORM3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE –––– 13(E)13(E)13(E)13(E) ICDICDICDICD SSSS Name of ICDSName of ICDSName of ICDSName of ICDS Increase inIncrease inIncrease inIncrease in ProfitProfitProfitProfit DecreaseDecreaseDecreaseDecrease in Profitin Profitin Profitin Profit Net (Net (Net (Net (RsRsRsRs.).).).) DescriptionDescriptionDescriptionDescription VIIIVIIIVIIIVIII SecuritiesSecuritiesSecuritiesSecurities 4000400040004000 4000400040004000 SecuritiesSecuritiesSecuritiesSecurities valued atvalued atvalued atvalued at cost or NRVcost or NRVcost or NRVcost or NRV scripscripscripscrip----wisewisewisewise TotalTotalTotalTotal 4000400040004000 CA. Pramod Jain
- 96. IXIXIXIX –––– BORROWINGCOSTSBORROWING COSTSBORROWING COSTSBORROWING COSTS CA. Pramod Jain
- 97. ICDS IXICDS IXICDSIXICDS IX –––– BORROWING COSTSBORROWING COSTSBORROWING COSTSBORROWING COSTS QualifyingQualifyingQualifyingQualifying AssetsAssetsAssetsAssets ICDSICDSICDSICDS Tangible / IntangibleTangible / IntangibleTangible / IntangibleTangible / Intangible AssetsAssetsAssetsAssets Inventories thatInventories thatInventories thatInventories that require 12require 12require 12require 12 mnsmnsmnsmns orororor more to bring tomore to bring tomore to bring tomore to bring to saleable conditionsaleable conditionsaleable conditionsaleable condition AS 16AS 16AS 16AS 16 Asset that necessaryAsset that necessaryAsset that necessaryAsset that necessary takes substantialtakes substantialtakes substantialtakes substantial period to get readyperiod to get readyperiod to get readyperiod to get ready for sale whichfor sale whichfor sale whichfor sale which generally is 12generally is 12generally is 12generally is 12 mnsmnsmnsmns CA. Pramod Jain
- 98. ICDS IXICDS IXICDSIXICDS IX –––– BORROWING COSTSBORROWING COSTSBORROWING COSTSBORROWING COSTS ICDS does not include exchangeICDS does not include exchangeICDS does not include exchangeICDS does not include exchange differences arising from foreign currencydifferences arising from foreign currencydifferences arising from foreign currencydifferences arising from foreign currency borrowings to the extent that they areborrowings to the extent that they areborrowings to the extent that they areborrowings to the extent that they are regarded as an adjustment to interest costregarded as an adjustment to interest costregarded as an adjustment to interest costregarded as an adjustment to interest cost as a borrowing costas a borrowing costas a borrowing costas a borrowing cost FAQFAQFAQFAQ –––– Q 21Q 21Q 21Q 21 –––– bill discounting charges arebill discounting charges arebill discounting charges arebill discounting charges are borrowingborrowingborrowingborrowing costscostscostscosts Capitalization:Capitalization:Capitalization:Capitalization: Specific BorrowingSpecific BorrowingSpecific BorrowingSpecific Borrowing General BorrowingGeneral BorrowingGeneral BorrowingGeneral Borrowing CA. Pramod Jain
- 99. ICDS IXICDS IXICDSIXICDS IX –––– BORROWING COSTSBORROWING COSTSBORROWING COSTSBORROWING COSTS ICDSICDSICDSICDS –––– 1111stststst put to useput to useput to useput to use ASASASAS 16161616 –––– Cessation when substantially allCessation when substantially allCessation when substantially allCessation when substantially all the activities necessary to prepare thethe activities necessary to prepare thethe activities necessary to prepare thethe activities necessary to prepare the qualifying asset for itsqualifying asset for itsqualifying asset for itsqualifying asset for its intended useintended useintended useintended use or saleor saleor saleor sale are complete, i.e. when the asset isare complete, i.e. when the asset isare complete, i.e. when the asset isare complete, i.e. when the asset is readyreadyreadyready to be put to useto be put to useto be put to useto be put to use Difference between ready to be put to useDifference between ready to be put to useDifference between ready to be put to useDifference between ready to be put to use and put to use is important…and put to use is important…and put to use is important…and put to use is important… Loan for vehicle. Interest between loanLoan for vehicle. Interest between loanLoan for vehicle. Interest between loanLoan for vehicle. Interest between loan taken and vehicle on road… capitalisetaken and vehicle on road… capitalisetaken and vehicle on road… capitalisetaken and vehicle on road… capitalise CA. Pramod Jain
- 100. ICDS IXICDS IXICDSIXICDS IX –––– BORROWING COSTSBORROWING COSTSBORROWING COSTSBORROWING COSTS FAQFAQFAQFAQ ---- Q 20Q 20Q 20Q 20 ----Borrowing costs disallowed u/s 14A, 43B,Borrowing costs disallowed u/s 14A, 43B,Borrowing costs disallowed u/s 14A, 43B,Borrowing costs disallowed u/s 14A, 43B, 40(a)(40(a)(40(a)(40(a)(iiii), 40(a)(), 40(a)(), 40(a)(), 40(a)(iaiaiaia), 40A(2)(b):), 40A(2)(b):), 40A(2)(b):), 40A(2)(b): Capitalization shall exclude those borrowing costsCapitalization shall exclude those borrowing costsCapitalization shall exclude those borrowing costsCapitalization shall exclude those borrowing costs which are specifically disallowed under specificwhich are specifically disallowed under specificwhich are specifically disallowed under specificwhich are specifically disallowed under specific provision of the Actprovision of the Actprovision of the Actprovision of the Act Capitalization of borrowing costs shall apply for thatCapitalization of borrowing costs shall apply for thatCapitalization of borrowing costs shall apply for thatCapitalization of borrowing costs shall apply for that portion of the borrowing cost which is otherwiseportion of the borrowing cost which is otherwiseportion of the borrowing cost which is otherwiseportion of the borrowing cost which is otherwise allowable as deduction under the Actallowable as deduction under the Actallowable as deduction under the Actallowable as deduction under the Act FinanceFinanceFinanceFinance Act, 2015Act, 2015Act, 2015Act, 2015 already insertedalready insertedalready insertedalready inserted proviso to secproviso to secproviso to secproviso to sec 36(36(36(36(iiii)(iii) that the interest expenses incurred for)(iii) that the interest expenses incurred for)(iii) that the interest expenses incurred for)(iii) that the interest expenses incurred for acquisition of capital assetacquisition of capital assetacquisition of capital assetacquisition of capital asset uptouptouptoupto put to use shall not beput to use shall not beput to use shall not beput to use shall not be deductible.deductible.deductible.deductible. CA. Pramod Jain
- 101. ICDS IXICDS IXICDSIXICDS IX –––– DISCLOSUREDISCLOSUREDISCLOSUREDISCLOSURE AccountingAccountingAccountingAccounting policy adopted for borrowingpolicy adopted for borrowingpolicy adopted for borrowingpolicy adopted for borrowing costscostscostscosts AmountAmountAmountAmount of borrowing costs capitalisedof borrowing costs capitalisedof borrowing costs capitalisedof borrowing costs capitalised during the previous year.during the previous year.during the previous year.during the previous year. ASASASAS ---- SimilarSimilarSimilarSimilar CA. Pramod Jain
- 102. ICDS IXICDS IXICDSIXICDS IX –––– PRACTICAL IMPLICATIONSPRACTICAL IMPLICATIONSPRACTICAL IMPLICATIONSPRACTICAL IMPLICATIONS Disclosure … same as per ASDisclosure … same as per ASDisclosure … same as per ASDisclosure … same as per AS Capitalize Interest if charged to revenue:Capitalize Interest if charged to revenue:Capitalize Interest if charged to revenue:Capitalize Interest if charged to revenue: For Qualifying assets as per ASFor Qualifying assets as per ASFor Qualifying assets as per ASFor Qualifying assets as per AS asasasas well aswell aswell aswell as ICDSICDSICDSICDS From date of ready to be put to use and put to useFrom date of ready to be put to use and put to useFrom date of ready to be put to use and put to useFrom date of ready to be put to use and put to use ForForForFor QualifyingQualifyingQualifyingQualifying asset as perasset as perasset as perasset as per ICDS but not aICDS but not aICDS but not aICDS but not a Qualifying assets as perQualifying assets as perQualifying assets as perQualifying assets as per AS:AS:AS:AS: Interest charged to revenue as per books to beInterest charged to revenue as per books to beInterest charged to revenue as per books to beInterest charged to revenue as per books to be capitalizedcapitalizedcapitalizedcapitalized uptouptouptoupto the date of put of usethe date of put of usethe date of put of usethe date of put of use includingincludingincludingincluding for loan taken for vehicles from date of loan takenfor loan taken for vehicles from date of loan takenfor loan taken for vehicles from date of loan takenfor loan taken for vehicles from date of loan taken till put on roadtill put on roadtill put on roadtill put on road CA. Pramod Jain
- 103. ICDS IXICDS IXICDSIXICDS IX –––– PRACTICAL IMPLICATIONSPRACTICAL IMPLICATIONSPRACTICAL IMPLICATIONSPRACTICAL IMPLICATIONS Exchange differences arising from foreignExchange differences arising from foreignExchange differences arising from foreignExchange differences arising from foreign currency borrowings to the extentcurrency borrowings to the extentcurrency borrowings to the extentcurrency borrowings to the extent ........ interestinterestinterestinterest costcostcostcost In books revenueIn books revenueIn books revenueIn books revenue In computationIn computationIn computationIn computation If related to s. 43AIf related to s. 43AIf related to s. 43AIf related to s. 43A –––– capitalizecapitalizecapitalizecapitalize If related to revenueIf related to revenueIf related to revenueIf related to revenue –––– not borrowing butnot borrowing butnot borrowing butnot borrowing but exchange differenceexchange differenceexchange differenceexchange difference CA. Pramod Jain
- 104. FORM 3CDFORM 3CDFORM3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE –––– 13(E)13(E)13(E)13(E) ICDICDICDICD SSSS Name ofName ofName ofName of ICDSICDSICDSICDS IncreaseIncreaseIncreaseIncrease in Profitin Profitin Profitin Profit DecreaseDecreaseDecreaseDecrease in Profitin Profitin Profitin Profit Net (Net (Net (Net (RsRsRsRs.).).).) DescriptionDescriptionDescriptionDescription IXIXIXIX BorrowinBorrowinBorrowinBorrowin g Costsg Costsg Costsg Costs 10000100001000010000 10000100001000010000 • Qualifying assets asQualifying assets asQualifying assets asQualifying assets as per AS & ICDSper AS & ICDSper AS & ICDSper AS & ICDS –––– inttinttinttintt from date of ready forfrom date of ready forfrom date of ready forfrom date of ready for use touse touse touse to date of put todate of put todate of put todate of put to useuseuseuse ---- 2000200020002000 • Qualifying assets asQualifying assets asQualifying assets asQualifying assets as per ICDS but not asper ICDS but not asper ICDS but not asper ICDS but not as per ASper ASper ASper AS uptouptouptoupto put to useput to useput to useput to use ----3000300030003000 • Exchange FluctuationExchange FluctuationExchange FluctuationExchange Fluctuation loss being borrowingloss being borrowingloss being borrowingloss being borrowing cost as per AS 16cost as per AS 16cost as per AS 16cost as per AS 16 ---- 5000500050005000 TotalTotalTotalTotal 10000100001000010000 CA. Pramod Jain
- 105. FORM 3CDFORM 3CDFORM3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE –––– 13(F)13(F)13(F)13(F) ICDSICDSICDSICDS Name of ICDSName of ICDSName of ICDSName of ICDS DisclosuresDisclosuresDisclosuresDisclosures IXIXIXIX Borrowing CostsBorrowing CostsBorrowing CostsBorrowing Costs • Refer to theRefer to theRefer to theRefer to the significantsignificantsignificantsignificant accounting policiesaccounting policiesaccounting policiesaccounting policies mentioned at Notementioned at Notementioned at Notementioned at Note No. _ toNo. _ toNo. _ toNo. _ to the Financialthe Financialthe Financialthe Financial StatementsStatementsStatementsStatements CA. Pramod Jain
- 106.
- 107. ICDS XICDS XICDSXICDS X –––– DISCLOSUREDISCLOSUREDISCLOSUREDISCLOSURE Provisions in respect of each class of provisions:Provisions in respect of each class of provisions:Provisions in respect of each class of provisions:Provisions in respect of each class of provisions: Brief description of the nature of the obligation;Brief description of the nature of the obligation;Brief description of the nature of the obligation;Brief description of the nature of the obligation; Carrying amount at the beginning and end of the PY;Carrying amount at the beginning and end of the PY;Carrying amount at the beginning and end of the PY;Carrying amount at the beginning and end of the PY; Additional provisions made during the PY, includingAdditional provisions made during the PY, includingAdditional provisions made during the PY, includingAdditional provisions made during the PY, including increases to existing provisions;increases to existing provisions;increases to existing provisions;increases to existing provisions; Amounts used, that is incurred and charged againstAmounts used, that is incurred and charged againstAmounts used, that is incurred and charged againstAmounts used, that is incurred and charged against the provision, during the PY;the provision, during the PY;the provision, during the PY;the provision, during the PY; Unused amounts reversed during the PY; andUnused amounts reversed during the PY; andUnused amounts reversed during the PY; andUnused amounts reversed during the PY; and Amt.Amt.Amt.Amt. of any expected reimbursement, statingof any expected reimbursement, statingof any expected reimbursement, statingof any expected reimbursement, stating amtamtamtamt ofofofof assetassetassetasset thatthatthatthat is recognisedis recognisedis recognisedis recognised for that expectedfor that expectedfor that expectedfor that expected reimbreimbreimbreimb.... ASASASAS –––– SME exemptedSME exemptedSME exemptedSME exempted from these. But many otherfrom these. But many otherfrom these. But many otherfrom these. But many other disclosures in ASdisclosures in ASdisclosures in ASdisclosures in AS CA. Pramod Jain
- 108. ICDS XICDS XICDSXICDS X –––– DISCLOSUREDISCLOSUREDISCLOSUREDISCLOSURE Contingent Assets:Contingent Assets:Contingent Assets:Contingent Assets: Brief description of the nature of the asset andBrief description of the nature of the asset andBrief description of the nature of the asset andBrief description of the nature of the asset and related income;related income;related income;related income; Carrying amount of asset at the beginning and endCarrying amount of asset at the beginning and endCarrying amount of asset at the beginning and endCarrying amount of asset at the beginning and end of the PY;of the PY;of the PY;of the PY; Additional amount of asset and related incomeAdditional amount of asset and related incomeAdditional amount of asset and related incomeAdditional amount of asset and related income recognised during the year, including increases torecognised during the year, including increases torecognised during the year, including increases torecognised during the year, including increases to assets and related income already recognised; andassets and related income already recognised; andassets and related income already recognised; andassets and related income already recognised; and Amount of asset and related income reversed duringAmount of asset and related income reversed duringAmount of asset and related income reversed duringAmount of asset and related income reversed during the PY.the PY.the PY.the PY. ASASASAS –––– no such disclosures, but have of liabilities,no such disclosures, but have of liabilities,no such disclosures, but have of liabilities,no such disclosures, but have of liabilities, etcetcetcetc CA. Pramod Jain
- 109. ICDS XICDS XICDSXICDS X –––– PRACTICAL IMPLICATIONSPRACTICAL IMPLICATIONSPRACTICAL IMPLICATIONSPRACTICAL IMPLICATIONS DisclosuresDisclosuresDisclosuresDisclosures Provisions, which are not as per ICDS to beProvisions, which are not as per ICDS to beProvisions, which are not as per ICDS to beProvisions, which are not as per ICDS to be disclosed in ICDS like:disclosed in ICDS like:disclosed in ICDS like:disclosed in ICDS like: Doubtful DebtsDoubtful DebtsDoubtful DebtsDoubtful Debts InvestmentsInvestmentsInvestmentsInvestments CA. Pramod Jain
- 110. FORM 3CDFORM 3CDFORM3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE –––– 13(E)13(E)13(E)13(E) ICDICDICDICD SSSS Name of ICDSName of ICDSName of ICDSName of ICDS IncreaseIncreaseIncreaseIncrease in Profitin Profitin Profitin Profit DecreaseDecreaseDecreaseDecrease in Profitin Profitin Profitin Profit Net (Net (Net (Net (RsRsRsRs.).).).) DescriptionDescriptionDescriptionDescription XXXX Provisions,Provisions,Provisions,Provisions, contingentcontingentcontingentcontingent Liabilities &Liabilities &Liabilities &Liabilities & ContingentContingentContingentContingent AssetsAssetsAssetsAssets 5000500050005000 5000500050005000 • Provision forProvision forProvision forProvision for doubtful debtsdoubtful debtsdoubtful debtsdoubtful debts –––– 2000200020002000 • Provision forProvision forProvision forProvision for diminution indiminution indiminution indiminution in value of longvalue of longvalue of longvalue of long termtermtermterm investmentsinvestmentsinvestmentsinvestments ---- 3000300030003000 TotalTotalTotalTotal 5000500050005000 CA. Pramod Jain
- 111. FORM 3CDFORM 3CDFORM3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE –––– 13(F)13(F)13(F)13(F) ICDSICDSICDSICDS Name of ICDSName of ICDSName of ICDSName of ICDS DisclosuresDisclosuresDisclosuresDisclosures XXXX Provisions, contingentProvisions, contingentProvisions, contingentProvisions, contingent Liabilities &Liabilities &Liabilities &Liabilities & Contingent AssetsContingent AssetsContingent AssetsContingent Assets Provisions in respect of each class ofProvisions in respect of each class ofProvisions in respect of each class ofProvisions in respect of each class of provisions:provisions:provisions:provisions: • Brief description of the nature of theBrief description of the nature of theBrief description of the nature of theBrief description of the nature of the obligation;obligation;obligation;obligation; • Carrying amount at the beginning andCarrying amount at the beginning andCarrying amount at the beginning andCarrying amount at the beginning and end of the PY;end of the PY;end of the PY;end of the PY; • Additional provisions made during theAdditional provisions made during theAdditional provisions made during theAdditional provisions made during the PY, including increases to existingPY, including increases to existingPY, including increases to existingPY, including increases to existing provisions;provisions;provisions;provisions; • Amounts used, that is incurred andAmounts used, that is incurred andAmounts used, that is incurred andAmounts used, that is incurred and charged against the provision, duringcharged against the provision, duringcharged against the provision, duringcharged against the provision, during the PY;the PY;the PY;the PY; • Unused amounts reversed during theUnused amounts reversed during theUnused amounts reversed during theUnused amounts reversed during the PY; andPY; andPY; andPY; and • Amt. of any expected reimbursement,Amt. of any expected reimbursement,Amt. of any expected reimbursement,Amt. of any expected reimbursement, stating amt.stating amt.stating amt.stating amt. of asset that is recognisedof asset that is recognisedof asset that is recognisedof asset that is recognised for that expected reimbursementsfor that expected reimbursementsfor that expected reimbursementsfor that expected reimbursements CA. Pramod Jain
- 112. TAKE CARETAKE CARETAKECARETAKE CARE Certificate of ICDS is nowCertificate of ICDS is nowCertificate of ICDS is nowCertificate of ICDS is now through Form 3CDthrough Form 3CDthrough Form 3CDthrough Form 3CD CA. Pramod Jain
- 113.
- 114. CA. Pramod JainCA.Pramod JainCA. Pramod JainCA. Pramod Jain pramodjain@lunawat.compramodjain@lunawat.compramodjain@lunawat.compramodjain@lunawat.com +91 9811073867+91 9811073867+91 9811073867+91 9811073867 © 2017 CA. Pramod Jain,© 2017 CA. Pramod Jain,© 2017 CA. Pramod Jain,© 2017 CA. Pramod Jain,